10 January 2009

Parliament Bound by Contract?

If I really cared about whether our democratic government was truly representative, I think I would be outraged by this story about the government locking in payments to suppliers for ID card contracts against a possible cancellation by the next government.

Ultimately, the next government could, I presume, pass a law saying that payments promised for ID card work were cancelled, and even that payments previously made could be reclaimed. Traditionally, parliamentary sovereignty meant that was possible.

Would that be a good thing? While I suspect that the contracts in question are being written as a kind of "poison pill" to sabotage Tory policy, it is legitimate that a business could seek up-front payments or guarantees to cover the setup costs of the work they are undertaking to do. A company that was faced with the loss of payment for work it had already done because an election had changed the government's policy would have a very legitimate cause of complaint.

The opposition could mitigate the injustice by giving good notice - now - of what they intended. That is made more difficult by the claim of "commercial confidentiality" made regarding the terms of the contract.

My line on this is that when a government signs a significant contract with a business, then it is not a matter of commerce, it is a matter of politics. It is, if not nationalisation, then at least something which is of the same kind as a nationalisation, but of different degree.

Therefore the ongoing dealings between the government and the supplier are a matter of politics not of commerce. If nullifying the contract is good politics but bad commerce, then it is what should happen. If the supplier doesn't like it, they shouldn't have got involved in politics. Furthermore, hiding the details of the contract on grounds of "commercial confidentiality" makes a mockery of democracy even by my loose standards.

I would also add that this sort of thing: Public Private Partnership and use of contractors in general, is a prime example, probably the best example on this side of the pond, of what Giles Bowkett was talking about. It's the kind of policy which looks, if not exactly libertarian, at least sort of halfway libertarian. It was supported, at least at the beginning, by the likes of the ASI and the IEA. And because it's a compromise, and because the nature of the political landscape means inevitably that what it was a compromise with was corporate interests - in this case the corporate interests of the consultancies that get paid for work like the ID card project - then as a result it's the sort of policy where half-way is much worse than nowhere.

If we were back in the 1970s when the only way to do this sort of system was to hire thousands of civil servants to develop it, we would be better off. Outsourcing gives us none of the benefits of the private sector, but a whole lot of extra cost in corruption and obscuring of the truth.

Finally, I suspect that the Tories, even if they had the balls, could not void the contracts as I have described. The suppliers would be straight off to the EU to cry foul. The brief alliance of Thatcherites and Eurocrats in the 1980s that gave us the single market have stripped the voters and their representatives in parliament of the power to do that.

2 comments:

IanPJ said...

Such notice was given to these companies by the Tories in Feb07.

Therefore I consider that cancellation without compensation is valid, as due warning has already been delivered.

IanPJ said...

http://www.independent.co.uk/news/uk/politics/tories-warn-firms-bidding-for-id-card-scheme-we-will-scrap-the-whole-idea-435236.html