I beg to move amendment No. 5, in clause 6, page 3, line 7, at end insert—

‘(d)an estimate of the likely cost of an inquiry’.

With this it will be convenient to discuss the following amendments: No. 39, in clause 18, page 8, line 34, leave out ‘unnecessary’ and insert ‘excessive’.

No. 20, in clause 18, page 8, line 34, at end add—

‘(4)In making any decision as to the procedure or conduct of an inquiry, the Chairman must within one month of the setting-up date publish an estimate of the likely cost of the inquiry.’.

A major reason for drafting the Bill was to respond to the spiralling costs of public inquiries. The Government stated in their consultation paper, “Effective Inquiries”,

“that any new legislation on inquiries should include a statutory requirement on the chairman to have regard to ... costs to public funds”.

That is not adequately dealt with in the Bill. As it stands, the chairman merely has the obligation to have regard to the need to avoid any unnecessary cost. There is no mechanism to keep an inquiry’s costs in check, so, as promised on Second Reading, we have tabled amendments to address that deficiency.

It is a well known fact that excessive amounts have been spent on inquiries in recent years. The regulatory impact assessment estimated that more than £300 million has been spent since 1990, and that was only allowing £14 million for the Saville inquiry, estimates   for which now range from £155 million to £250 million. Viscount Goschen put those sums in context by reminding us that according to the figures produced by the noble and learned Lord Chancellor, it would cost £150 million to run the supreme court for 20 years. The figures are astounding and indefensible. The money has been spent and we must now ask how that exorbitant expenditure can be avoided.

Viscount Goschen made a convincing case for a solution. Without a budget, there can be no hope of proper cost control. Having an estimate on the public record at the outset would be a powerful tool in ensuring that the minds of the chairman and the commissioning Ministers were focused on costs. The Conservative Opposition continue to support that approach to enforce some kind of cost control on those who are setting up and running inquiries.

Amendment No. 5 would require the Minister setting up the inquiry to lay the likely cost before Parliament, thereby forcing him to take some responsibility for his decision to launch the inquiry and provide transparency in the budgeting process. It is appropriate that Parliament should know how much an inquiry will cost from the outset and provide some democratic legitimacy for the ministerial decision to spend taxpayers’ money in that way.

I have some sympathy with the hon. Gentleman because costs need to be kept under control, but I am a little puzzled about how it is possible to estimate the costs in a complex inquiry. Although no one wants costs to spiral out of control, the chairman may pursue lines of inquiry that lead to costs above the original estimates. I am worried that the amendments may curtail the inquiry unnecessarily and not lead to a proper conclusion.

The hon. Lady makes a fair point. I will come to the importance of flexibility, which is reflected in our amendments.

Amendment No. 5 should be read with amendment No. 6, which would require an oral statement to the relevant Parliament or Assembly, as explained earlier by my hon. Friend the Member for North-East Hertfordshire (Mr. Heald). That would enable Parliament to have true involvement in the Minister’s decisions on setting up the inquiry—in this case, allowing debate about whether the likely costs of an inquiry are appropriate in the circumstances. We doubt that any Assembly would accept £250 million as an appropriate budget to spend on an inquiry.

Once the inquiry has been set up, the Minister will have limited involvement in running the inquiry; he will not and should not have a final say about how and where the funds are spent. That would affect the inquiry’s independence, which is addressed by amendments Nos. 30 and 31. Therefore, any amendments dealing with the inquiry’s costs must also consider the chairman’s involvement in spending. Amendment No. 20 addresses that very issue. It   requires the chairman, when taking a decision about the procedure or conduct of an inquiry, to publish an estimate of the likely cost of the inquiry within one month of the setting-up date. That would force the chairman to consider carefully the possible costs to be incurred and the most appropriate way to approach the tasks that he has been set. It would provide accountability of the chairman’s expenditure and, through public scrutiny and legitimate expectations, put pressure on the chairman to keep within the published budget.

The amendments would ensure that a budget was set at the outset by both the Minister and the chairman. It would then be open to Parliament and the public to object to excessive forecasts and scrutinise expenditure over and above the expected budget. I should point out—this relates to the point made by the hon. Member for Cambridge (Mrs. Campbell)—that the amendments do not impose a cap on an inquiry’s expenditure. We recognise that inquiries require the flexibility to follow new leads of evidence and interview further witnesses when appropriate. However, Ministers and chairmen running inquiries should not be given blank cheques to set unlimited amounts on unspecified inquiry costs.

What would happen if it became obvious that an inquiry would exceed the estimated amount that the Minister had declared at its initial stages? Would the inquiry have to be abandoned or would the Minister have to return to the House and make a further statement? Will the hon. Gentleman explain a little more?

Although we are not arguing for caps—it is not a matter of coming back for more—it is entirely appropriate that at the initial stages of the inquiry the chairman and the Minister, working together, make an assessment of the likely costs. For example, when a court case is started, one of the questions that parties ask their lawyers is how much it will cost. Just because it is a public inquiry does not mean that it should have a blank cheque.

In drawing the parallel with a solicitor advising a client, the hon. Gentleman raises an important point. In my experience as a solicitor, what often happens is that clients say, “If that’s what it’s going to cost, it’s just not worth it. I won’t go ahead.” Is that what the hon. Gentleman is suggesting is a desirable basis on which to conduct public inquiries?

No, I am not suggesting that. I am just saying that there must be some financial discipline in the process, as the amendment proposes.

It is recognised that setting budgets is not an easy task—in the private sector or in the public sector. Lord Fraser of Carmyllie noted that

“it is very difficult to give an absolutely accurate forecast of the cost of an inquiry, not least because those who have to chair it will not yet have decided whether they will allow any particular party to be represented ... But ... when the Minister has decided to set up an inquiry and has discussed it with the chairman, there must be at least some appreciation, understanding or calculation of who will be allowed to attend ... Parliament should be given the   opportunity to know what the inquiry will cost at the outset. If there can be only an estimate, that is the best that can be done.”—[Official Report, House of Lords, 7 February 2005; Vol. 669, c. 641.]

We fully support the noble Lord in his commentary.

Setting a budget is difficult and challenging in all circumstances, but particularly where there are uncertainties, as is the case for any inquiry. However, setting a budget is a necessary exercise that is routinely carried out by responsible individuals, companies and Administrations. It is unrealistic to argue that an estimate cannot be made for an inquiry. Yes, it would be difficult, but the difficulty of the task is not a good reason to waste—potentially—millions of taxpayers’ pounds.

That view is supported by the Public Administration Committee, which included in the core recommendations of its report “Government by Inquiry” that

“Ministers should announce a broad budget fairly early on at the start of an inquiry. Any increases over the announced limits would then need to be publicly explained.”

It also referred to the need to

“Set budget limits, publish costs and explain overruns” in its proposed principles of good inquiry practice.

If I follow the hon. Gentleman’s argument correctly, he is saying that we should put estimates on the cost of public inquiries and that, although there would be no legal penalty for exceeding the estimate, those conducting the inquiry would have to explain the reasons to the general public. Does he not think that it might impede the process of the public inquiry if they were distracted from their important work in order to explain to a wider public why they overspent the budget?

No, I do not. It is quite acceptable and proper that, if an original estimate is given, a Minister should have to stand at the Dispatch Box and explain why the costs have trebled or whatever.

The Minister is not responsible for conducting the inquiry. The chairman or chairwoman would be the person responsible, so would it not be their responsibility to explain, and would that not distract them from the work that they had been asked to do?

I only wish the hon. Gentleman’s comment were correct. He will have heard me and other hon. Members repeatedly saying how the Government have much too much to say about how inquiries are conducted. Let us say for the moment that he is correct. That still does not mean that the Government should not have to be responsible for explaining why costs have overrun. If the chairman has to explain that with the Government, that is what he will have to do. These are basic accounting principles. There is no reason why people should not have an explanation when public money costs significantly overrun.

I am sorry to pursue the hon. Gentleman on this point, but is he really saying that if a public inquiry overruns its estimated costs, it is the   Government’s fault and so the Government must explain? That is what he has just told the Committee. He needs to get his thinking a little more clear on this point.

I did not say that at all, as the record will show. If costs have overrun, they will have done so for a reason. That should be explained.

Who by?

By the Minister and the chairman.

It is not the Minister’s fault.

Order.

If I may, I will move on.

We the Conservative Opposition believe that the Government have failed to introduce statutory controls on the cost of inquiries, despite the overwhelming evidence in favour of such procedure, including in their own consultation paper. It would be a missed opportunity if we did not seize this timely occasion to address the issue of inquiries’ costs. On Third Reading in another place, the Government seemed to be in favour of introducing some form of controls on costs, at least in principle. Since then they have gone rather quiet on the issue. We therefore hope that they have now had time to consider the issue further and are about to announce some sensible new proposals.

We have gone from higher principles to bean counting in one small step and with effortless ease. I feel exceptionally uneasy about the hon. Gentleman’s proposals. He asked how we can best put a cap on costs of inquiries, such as the Saville inquiry, which seems to be in vogue in today’s debate. Its costs would have been reduced greatly if it had been held 20 or 25 years ago. The reason why many inquiries run to such length and expense is often that the culprit of the inquiry has refused it for so long. The Saville inquiry was always going to have to be held eventually. I am convinced that a good part of the reason why we are in such a situation is that we have allowed matters to run for so long before we gave in to the need for a public inquiry.

I want to consider the practical consequences of the amendments tabled by the Conservative party before I speak briefly about amendment No. 39. A Minister would have to go to the House or make a written statement about the estimated costs of the inquiry. That presupposes all sorts of things, such as the Minister himself or herself knowing exactly what different witnesses in the inquiry will say, how long it will take them to say it, what costs will be involved, who will be legally aided and who will be financing their own representation. I do not understand how that can feasibly and practically be carried out.

Even if such procedure were carried out, what happens if the estimated costs of the inquiry were exceeded by the costs of the inquiry in practice? Presumably, as the hon. Member for Weaver Vale (Mr. Hall) said, the Minister would have to answer for that. He would have to answer for something that was   not his doing in the first place. Moreover, it ought not be something for which he should be answerable. If the inquiry is to be independent of the Government—the crux of everything that the hon. Member for Huntingdon said this morning—the Minister should not have any say in the costs of it. I feel exceptionally uneasy about the fact that the practical consequences of what the hon. Gentleman said are unworkable in parliamentary terms.

Having dealt with several inquiries in a previous life, I shall draw on my experience. As a procurator fiscal deputy and a solicitor in private practice in Scotland, I have dealt with fatal accident inquiries and inquiries under the Merchant Shipping Act 1995. It is impossible to estimate how long inquiries will last. Invariably, witnesses say something slightly different in the witness box from what they say in their precognition, the consequences of which can be dramatic in an inquiry that was intended originally to last perhaps for a few days, but which could run to weeks. Indeed, certain inquiries quite properly ought to run to weeks. The idea that a cap can be put on such proceedings is wrong.

I deliberately use the term “putting a cap on” costs because that would be the inevitable consequence of the direction in which the hon. Member for Huntingdon wants to take us. If, as he said, the financial discipline must be meaningful, there must be a cap, otherwise there is no point in it. To carry out an academic exercise into the probable costs, but then to wait and see what they are is a waste of parliamentary time. It is also an unnecessary constraint on, and a threat to, the independence of the inquiry.

Having said all that, there is clearly legitimate public worry about the way in which some inquiries can run on. It is right that we consider ways in which to deal with that without striking at the independence of the inquiry, with which the amendments tabled by the hon. Member for Huntingdon are concerned.

Such as?

I am just coming to that. The hon. Gentleman referred to Lord Fraser of Carmyllie, who knows a thing or two about inquiries. He presided over the inquiry into the running of the construction of the Scottish Parliament—I would not have wanted to estimate the cost of that at the start. Lord Fraser did an exceptionally good job in that inquiry. He did not order things in such a way as to incur any unnecessary or excessive expense, but it would have been difficult to estimate that expense at the start. The terms of amendment No. 39, tabled by my hon. Friend the Member for North Cornwall (Mr. Tyler) and I, relate to that matter. We seek to replace the word “unnecessary” with “excessive”, so that clause 18(3) would then place a duty on the chairman to

“act with fairness and with regard also to the need to avoid any”— excessive—

“costs.”

One would hope that the chairman would always act in a way that would avoid unnecessary costs.

A duty is placed on the chairman to have regard to the costs that are involved; he will not be dictated to in that respect by the Minister or even by Parliament, but he has to be mindful of the consequences of any decision that he takes. I believe that that is as far as Parliament ought to go and reasonably can be expected to go. It is right that that duty should exist, but in a hierarchy of duties that are placed on the chairman and, indeed, on the Minister, it must come somewhere below the duty to act fairly and independently of the Government.

I shall first take amendments Nos. 5 and 20, which deal with the requirement for estimates to be made in advance of the costs of an inquiry. We have significant concerns about the amendments.

Amendment No. 20 would require the chairman to give a figure within one month of establishing the proceedings. I have heard the concerns of the hon. Member for Orkney and Shetland, and we also feel that there are many good reasons why the amendments should not be included in the Bill. It does not strike me as a good idea that we should have an inquiry into the costs before the inquiry gets under way, although I do not say that we cannot find better ways of encouraging good, sound budgetary management of costs as the inquiry proceeds.

It is the chairman’s job to plan the inquiry. To require the Minister to give a broad figure right at the start, ahead of any assessment by the chairman, could have the effect of confining the inquiry before the chairman has even considered the issues. I gather that Lord Laming, during his contribution to the debate in the other place, mentioned that sometimes it can take a significant period for the inquiry really to understand the true scale of the task before it. In the case of his inquiry into the death of Victoria Climbié, he said that even one month in, the inquiry did not have a full picture of how long proceedings would take. We must therefore be careful about drawing up an arbitrary time scale, even of a month, never mind trying to make precise predictions in advance.

Even if one has a requirement for an estimate, that is not the same thing as a requirement to avoid unnecessary cost, which is provided for in clause 18. Neither amendment No. 5 nor amendment No. 20 would provide any control of the cost; other measures included in the Bill would do that better. In our view, it is more important to encourage budgeting throughout the inquiry, in close association with the sponsoring Department. There is much that we could do with the procedure rules to assist in that. For instance, in another place, my noble Friend Baroness Ashton of Upholland made a commitment to include the issue of cost estimates when there is consultation on the secondary legislation, which will set those out.

There are dangers in producing arbitrary estimates. Anyone who has done building work knows that estimates are not the same as the actual costs involved. We can see that there might be benefits in publishing estimates at appropriate stages, so that the inquiry can   be held to account, but that must be done when the estimates are meaningful. I am concerned that the amendments might require Ministers in future Administrations to pluck figures from the air at arbitrary times, which would not help anyone.

On amendment No. 39, I do not disagree with the gist of what was said, but on balance, having considered the proposal to use the phrase “excessive cost”, we believe that the concept in the Bill of avoiding “any unnecessary cost” is preferable, and I hope to give a few reasons why. The word “unnecessary” should be interpreted in the context of the inquiry; something will be necessary if it assists the inquiry in fulfilling its terms of reference. There is a great deal of similarity between the clause as it stands and the amendment. For instance, spending £15 when £10 would do might be both unnecessary and excessive. There is a subtle difference, however. The clause as drafted requires the chairman to think about the management of the inquiry in a more fundamental way, which is important. It requires him to think about what actions are necessary to achieve the aims of the inquiry, rather than simply to avoid paying excessive amounts for the actions that he takes. For example, it might not be excessive to pay a moderate fee for legal representation for three different groups with similar interests, but it might be unnecessary because they could assist the inquiry just as well if they shared representation.

I assure hon. Members that the clause will in no way hinder the inquiry’s ability to get to the facts and do its job. If something is necessary, it should be done and paid for. We hope to strike the right balance and not be tipped too far in the wrong direction by some of the official Opposition’s amendments. With those comments and for those reasons, I hope that the amendment will be withdrawn.

The hon. Member for Orkney and Shetland (Mr. Carmichael) said that I had suggested a cap. That is simply not correct. Certainly our amendments do not suggest a cap in any way.

In fact, I quite explicitly said that a cap was an inevitable consequence of the amendments that the hon. Gentleman proposes. Does he not see that if what he speaks of as financial discipline is to have any meaning, we would eventually end up with a cap?

The hon. Gentleman said that in his second round of comments. Initially, he said that we were suggesting a cap, but I am pleased that he has made that clear.

The hon. Gentleman then said that he did not know how estimates could be made, although when he discussed the private sector he admitted quite plainly that estimates are made all the time. The Liberal Democrats and the Government seem to be saying that where taxpayers’ money is concerned, different bases apply and estimates are not appropriate. Conservative Members maintain that it is fully appropriate that the Minister who calls for the inquiry should be able to give legitimacy to the costs involved in it and should be responsible for explaining to Parliament variations to   the estimates. Having said that, I do not intend to press the amendments to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 ordered to stand part of the Bill.