House of Commons Hansard Debates for 18 Oct 1990

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earliest opportunity of the contingent liabilities under the Varley-Marshall-Joseph assurances, which were very substantial indeed.

The taxpayers who watched the Public Accounts Committee taking evidence at the meeting on 4 December must have been aware for the first time that those large contingent liabilities still existed and that they might have had to put their hands into their pockets once again. That did not happen, because the company was sold. We also pressed the Department of Trade and Industry on why it did not opt for a public flotation to test the market. That had been done before. We were told that, after extensive analysis, it had concluded that it was not a viable prospect and that trying to sell the shares on the open market was not really a serious runner.

We looked closely at the money involved. It has been talked about a great deal in the press and on radio and television. It was not just the £150 million that British Aerospace paid for the company that interested us : it was also the assets which the company acquired in return for the £150 million and what happened to them. At the end of the day, all that added up to a net cost of £460 million to the British taxpayer, because it included a debt write-off of £469 million, further assistance in the form of regional assistance, the easing of tax restrictions and the payment of British Aerospace's costs. It also included withdrawal by British Aerospace from the Columbus project.

We had to consider whether the spending of £460 million of British taxpayers' money could be justified in the very speedy disposal of that company to British Aerospace. We had it in mind that, because the Department did not have the benefit of competition to determine a fair price, it had nothing to act as a benchmark or a valuation of the assets in negotiations with British Aerospace. The Committee was told that the aim was to assess a fair price for the company on a going concern basis, taking account of past losses, including interest of £2.7 billion, injections of public funds of £2.9 billion, and potential liabilities under the Varley-Marshall-Joseph assurances of substantially more than the £1.6 billion that I have just mentioned.

The company had achieved a profit--not a very big one--of £27.9 million before tax and interest, which it hoped to improve in subsequent years, but only at the expense of a £1.5 billion capital expenditure and restructuring programme. In looking at the episode, one must take into account those two huge figures, the £1.6 billion contingent liability and the £1.5 billion capital expenditure and restructuring programme. They are very large sums of money indeed. Clearly, any company considering the acquisition of the Rover Group from the Government would have had to think carefully about whether the modest profits of the company would justify taking what must be considered a fairly substantial commercial risk, bearing in mind the uncertainty of the motor industry, the fact that far more cars are being produced than there are customers to buy them, and the fact that, all over Europe, Governments are supporting and propping up motor companies by subsidies of one kind or another, whereas if there were no subsidies in the free market there would undoubtedly have been a considerable rationalisation of motor manufacturing capacity some time ago.

We had to look at all those figures and try to balance them. I cannot say more than that. I cannot pre-empt any decisions that the Committee may come to in its wisdom,

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on which it will report to the House in due course. However, I can refer to the sale of the company's assets, which were quite substantial. I think that they amounted to about £106 million. That matter must be considered, together with the purchase price of the company.

The right hon. Member for Ashton-under-Lyne referred to the absence of a clawback provision, something with which we are all familiar. When an asset which belongs to the taxpayer is disposed of and it is subsequently proved that it has been disposed of at a price lower than it should have been, there is often provision for clawback. We asked why, in the case of the sale of the Rover Group, no provision had been made in the sale and purchase agreement for clawback within a prescribed period.

In reply to our questioning, the Department of Trade and Industry told us that the Government had imposed a repayment clause in relation to the main core of the Rover Group's business and on the tax losses on the company's trading, but they had not extended those arrangements to the disposal of surplus sites and the disposal of stakes in the associated companies. I should not be at all surprised if the Public Accounts Committee had more to say about that when it eventually makes its final report on this matter.

It was therefore with considerable concern that the Committee, in studying the final memorandum from the Comptroller and Auditor General, noted that the £150 million price of the Rover Group did not have to be paid until 30 March 1990. We are all familiar with the offers that are made nowadays by just about every motor company--one does not have to pay any interest for a year. We are not so familiar with such a situation when it comes to disposing of public assets, yet it appears that that is virtually what happened--the company did not have to pay until the end of March. I can only guess that there must have been some considerable arm twisting to persuade British Aerospace to buy it and for the Government to have accepted that condition.

The Committee asked why that fact had not been publicly announced. We were told that those matters were referred to in the proper place in relation to parliamentary scrutiny and control of the estimates and expenditure under various legislation. Vigilant though Members of Parliament are, it has been known that perhaps not all of them scrutinise the estimates as carefully as they should ; they may therefore miss, deep within them, a fact such as that which we felt was so material to our consideration of the Rover Group. If such a sale is ever again contemplated, the date on which payment is due should be made known to the House. Hon. Members should not be left to discover it by accident from a close scrutiny of the estimates with a large magnifying glass.

The House will have to await the final chapters of this interesting episode. I believe that the Committee did a powerful job in flushing out much of the information that the public had a right to know. On this occasion, it did so with the television cameras switched on. I have subsequently met many people who are not as well informed about what we do here in Parliament as hon. Members, but who said that they found it the most fascinating investigation by a parliamentary Committee.

That greatly encouraged me. It convinced me that television has been a welcome innovation into the proceedings of the House and the Standing Committees. I hope that we shall see far more of the work of our Select

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Committees and our Standing Committees on television in future, because many people who cannot easily come to London to sit in the Strangers' Gallery can take a great deal of interest in what is going on. That is of considerable benefit to us, because they often send us information that we can use when questioning witnesses.

In conclusion, I pay tribute to our Chairman for the most skilful way in which he conducts our proceedings. I hope that this will not be the last such debate in which we shall hear a speech from my hon. Friend the Member for Scarborough (Sir M. Shaw), who is a wonderful colleague, and a skilful member of the Committee. I hope that we shall have another such debate before the end of this Parliament. I make the same remarks about my hon. Friend the Member for Rutland and Melton (Mr. Latham), who said in passing that this might be his last such debate because he is not seeking re- election to Parliament. I shall never forget his powerful contribution in our six-month inquiry into the De Lorean affair. It was a substantial contribution to parliamentary scrutiny of the Executive.

8.22 pm

Mr. John Battle (Leeds, West) : Unlike most hon. Members who have spoken in the debate, I have never been a member of the Public Accounts Committee, but I believe that its work is vital to good government and to the well-being of our constituents. This collection of reports has an impact on some of the poorest of our constituents, such as those on housing benefit, pensioners and those living in rented housing. The Committee's reports should be taken seriously by all hon. Members. I agree with the comments made by the hon. Member for Northampton, South (Mr. Morris) on the presentation of the reports and their number. He said that many of the reports are lost to time, buried in filing cabinets, and that they are not linked to later reports. As a result, the recommendations are not connected and are not taken as seriously as they should be.

I shall concentrate on four of the reports--the retail prices index report , which is the 34th report of the 1989-90 Session ; the report on housing benefit, which is the third report of the 1989-90 Session ; the report on housing association grant and housing needs allocation which is the 27th report ; and the 16th report, which deals with financial management in the national health service. I recall that a recent Government press release used the retail prices index almost as a unique selling point because the Government were anxious to claim that, because increases in social security and pensions which are to be announced in the forthcoming uprating statement, will be set at current inflation rates--at the rate this October --the poorest pensioners and those in receipt of social security benefits will receive a bumper bonus in April. However, that relies on the crucial assumption that inflation will be reduced by then. Furthermore, the briefing failed to mention that in the previous five years the rate of inflation when the benefits were fixed in October was lower than the actual rate of inflation when the benefit payments started the following April. In other words, for five years those on pensions and benefits have, in effect, been shortchanged.

If that is seen as a strong statement of the case, I refer hon. Members to the report on the retail prices index. In paragraphs 30, 31 and 32 the Committee draws attention

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to a computer error that led to an understatement of the retail prices index in 1986 and again in 1987. As the report states, that led to

"many millions of people receiving lower pensions and benefits than they were entitled to receive."

Paragraph 32 states :

"The Government considered that the Exchequer should not benefit from the error and special compensation payments, totalling some £102 million, were made to recipients of specified pension and social security benefits. In addition, donations totalling £14 million were made to appropriate charities to reflect small underpayments to a large number of beneficiaries rather than incur disproportionate administration costs in meeting individual payments. Nevertheless, the estimated administrative cost of the compensation exercise was some £5 million."

In other words, the cost of correcting the error and of giving the money to charities was £5 million. Although the report states that it involved

"small entitlements to a large number",

we are talking about weekly amounts being deducted from people's pensions and benefits, which could have had significant effects. It meant that the poorest in our society were paying the price for that computer error.

The language of inflation is changing. We do not just have inflation now ; we have "headline inflation" and the "underlying rate" of inflation. It is almost as if there is a deliberate attempt to split the concept of inflation. We have already heard proposals to take mortgages out of the retail prices index. The Public Accounts Committee report refers to that--I am glad that it recognised the difficulties of doing so. There have also been proposals to remove all housing costs from the RPI. When that proposal is advanced, it might be worth reflecting on the fact that there is a rampant rents explosion. Rents are increasing far too quickly and beyond the rate of inflation, yet we now hear that housing costs may be deducted when calculating the rate of inflation.

There have recently been proposals to ignore oil price rises when calculating inflation. It seems logical to some--perhaps to those who believe that inflation could be brought down to zero--that if everything in life that increases in price were excluded from the calculation, inflation could be reduced. The easy way of bringing down inflation is by deflating the way in which it is assessed. Of course, we need a realistic measure of the price changes in goods and services. That is basic to any assessment, whether of housing benefit payments or hospital budgets. It is essential that people know where they stand, so that budgets can be assessed in the first place. But one does not arrive at that realistic measure by manipulating inflation down because its actual rise is so deeply embarrassing to a Government who are committed to abolishing it entirely.

We are awaiting the Treasury response to that report from the Public Accounts Committee. We should look forward to it but when the new means of defining the retail prices index is brought before us we should not forget that many millions of people depend on that assessment for their pay and their pensions. It is absolutely crucial to get it right.

There is a clear link between the report on the retail prices index and the third report of the Committee on housing benefit. In the Treasury minute in response to the housing benefit report, it is more than clear that there has been enormous difficulty with housing benefits because of a mismatch between Government policies in the Department of the Environment, which deals with the whole structure of housing and rent costs, and the practice

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in the Department of Social Security. I quote the conclusion of the Public Accounts Committee, which appears in the Treasury minutes : "We find it unfortunate that an important measure of controlling Housing Benefit expenditure--the power to ask the Rent Officer to determine a fair rent for tenancies entered into before April 1989--was withdrawn. We recognise, however, that policy in this area is mainly the responsibility of the Department of the Environment." The Treasury minute did not go on to add the conclusion of the sentence which said :

"and trust that they were aware of the considerations which were of importance to the Department of Social Security."

I remind the House that in March 1988 there were two Bills before the House on which I had the fortune or misfortune to serve in Standing Committee practically simultaneously. One was the Local Government and Housing Bill which dealt with the deregulation of rents. The other was the Social Security Bill, which dealt with fixing the formula for housing benefit repayments to local authorities. In another Treasury minute we read :

"DSS and the Department of the Environment maintain close liaison on issues such as this where their policies interact. The Government decided to repeal the power of local authorities to apply for registration of a fair rent for a regulated tenancy".

The difficulty was that the boxed thinking of the Departments meant that one Standing Committee did not know the policy measures being dealt with by the other and which were incorporated in the Bill, which later became an Act. It was pointed out at the time that simply to deregulate rents would result in housing benefits being paid on astronomically high rents. That was not regarded as a problem in the Department of the Environment Bill but the DSS had not realised the impact of deregulating rents on its budget.

When one Department does not know what the other is doing, it is crucial that such matters are ironed out for one simple reason. If there is a difference between the level of the rent and the amount of housing benefit paid to those who are means tested in order to receive assistance to pay their rent, it is crucial to know who pays the difference. Is it the tenant, who is means tested and may be on full housing benefit? If such tenants find that they get rent increases they cannot pay they may receive notice to quit and are evicted. Or must the local authority pay the difference? In that case, other local authority tenants make up the difference because the amount falls on the local authority housing budget. I am glad that at last the issue of the abolition of fair rents has been picked up and that it has been acknowledged that a space has been opened up for exploitation of housing benefit by unscrupulous landlords. The report referred to

"abuse by landlords who require tenants to pay unreasonably high rents on which benefit is then paid."

The key question of who pays the difference--the tenant or the local authority--must be answered because those entitled to full housing benefit as a result of means testing of their already low incomes should be the last people to pick up the difference.

In the report on housing association grants and housing needs and allocations we read a clear policy statement :

"Social housing is intended for those who cannot afford market prices or rents".

Again, there is a clear conflict of policy. The Government encourage market rents, which in turn undermine social housing. In practice social housing is being priced out. Even housing association housing is driven to cut costs and increase rents. Although the Treasury response cannot

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and has not taken account of the recent instruction from the Housing Corporation to housing associations that they must compete for housing association grants, the impact of that action will be an increase in rents.

The assessment of housing needs is the assessment that local authorities make of their local housing resources. They must assess what their area needs. The assessment is submitted to national Government. Local authorities are then given, not a grant, but permission to borrow, in order to get on with the job of providing and maintaining the housing stock in their area. The assessment is based on the general needs index. I draw attention to the report, which stresses that the index is not sufficiently locally sensitive to changing needs and improvements and developments in housing. To give a practical example, if an authority in an inner city area such as Leeds has many houses with outside toilets it is given a weighting, because the houses need to be provided with inside toilets. But if the authority improves all those houses it will be penalised in the allocation. In practice, it is better to keep the houses with outside toilets because that increases the local authority's weighting. I am glad that the issue of the general needs index has been raised, but the key is in paragraph 14 of the report. It shows beyond a doubt that the crucial issue is that of resources. It says : "Because resources had been too limited and the process of damping' operated since 1986 had limited changes in the Index scores, the Department had only used the Index in an attenuated form since 1986."

Paragraph 15 says :

"We regard it as unsatisfactory that the distribution of housing resources to local authorities has been based for so long on out-dated assessment of needs."

That focus is most welcome. Again, the emphasis must be on the general lack of resources. I accept that, as the Chairman of the Committee made clear, the reports are written in restrained language. However, there has been a deliberate reduction in local authority housing budgets of two thirds in the past 10 years. My own authority needs and has asked for £112 million for this year's programme. It will be interesting to see what response we receive in the weeks and months ahead. In the meantime, I hope that when we consider housing needs we take account of the absolute shortage of housing and the needs of people for a decent, appropriate and affordable home. Lastly, I wish to glance at the report on the health service. In the general statement in the Treasury minute paragraph 59 says : "The Department of Health considers it most important that health authorities should be in a sound financial position when the White Paper changes are introduced and has made elimination of deficits a priority for 1990-91 through flexible and realistic planning." It seems that the entire response of the Treasury to the Public Accounts Committee report is based on the future projections for the White Paper. We are entitled to ask what that statement means. The Public Accounts Committee could be drastically overworked in the next few years examining health service reports precisely because of the changes in the White Paper. The issue at root is balancing the books for the deadline of next April when hospitals put forward their bids to be self-governing trusts and to opt out.

The PAC recognises the difficulties of planning using estimated pay and price inflation, which is calculated a long time in advance. The current policy that has been implemented augurs no real change in practice from the

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proposals in the report. For example, Leeds general infirmary--the LGI--has put in for self-governing status and it must balance its books by April. It has, however, overspent its budget for the first five months of this year and across the entire district health authority the deficit has now reached £500,000. That deficit has largely arisen from funding for Leeds general infirmary.

Unit general managers have been instructed to freeze staff appointments and to cut spending on drugs and equipment, and catering and portering services are to be reduced at Chapel Allerton and Newton Green hospitals. The director of finance has instructed that vacancies in hospital administration are not to be filled and that payments of bills are to be delayed where possible. That is precisely the opposite of the recommendation in the PAC report and the response to it by the Department of Health recorded in the Treasury minute. That minute makes it clear that where possible the payment of bills is not to be delayed. It is clear from the current budget plans and their implementation that ward closures and cuts in essential services represent the only option for Leeds general infirmary if it is to get its budget deficit under control or anywhere near balanced by next April.

The PAC report devoted a great deal of attention to condemning "crisis management". Paragraph 66 of the Treasury minute records that the Department of Health

"shares the Committee's condemnation for the crisis management measures used in the NHS ; such measures are never acceptable." Crisis management is happening now, but what of the future? The inflation estimates in the documents provided for the opting out of Leeds general infirmary and St. James's are miles from reality and the inflation figures for two areas of the same city have been estimated at between 5, 3.5 and 3 per cent. for the LGI and 7, 5.5 and 5 per cent. for St. James's for the years 1990-93. There is a real discrepancy and that is especially important when one considers that if the estimated inflation figure is not met the expected impact of the actual inflation will be provided for by

"a reduction in service levels".

Recently the Leeds Western health authority has had to pay out about £1 million in compensation. I understand that only one third of a million may be met out of the local budget, but even that will mean a reduction in local services.

The Leeds health authority budget could be balanced if land and property were sold--the houses that Leeds general infirmary owns--but site sales to balance the books cannot be the way out of crisis management in the short term. That is not an appropriate programme for an expansion of services.

I hope that, before the trust proposals are put forward, the Department of Health will seriously consider the PAC report and the Treasury minute on it. I hope that those reports will be sent to the regional health authority so that it can consider them before submitting its details. If that does not happen, the same mistakes that arose over housing benefit and the computer error and housing rents will be repeated. Despite advance warnings, we shall find that, surprise, surprise, in future years the accounts of the self-governing hospital trusts and declining health service provision will provide the bulk of the work for the PAC.

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I hope that the Treasury will advise the Department of Health to look carefully again at the authority's proposals before they are proceeded with.

8.43 pm

Mr. Richard Page (Hertfordshire, South-West) : First, I should like to endorse all the references that have been made by the Chairman of the Committee and other Committee members to our late colleague Ian Gow. Nothing that I can say can add to what has already been said, but we have a duty to ensure that his memory never fades so that the murderous creatures who brought about his death realise that they will never be able to achieve their aims with the bomb but only through the ballot box.

I am always surprised that this debate is not better attended and not subject to greater demand by hon. Members because the material source is rich and varied, as the hon. Member for Leeds, West (Mr. Battle) has just illustrated. There is no danger of galloping over the same old ground for the sixth or seventh time. One should never call the speeches of hon. Members boring, but a debate on a narrower subject tends to be somewhat repetitive when the same fact is examined in a variety of different ways. Perhaps we could learn something from the Bundestag, where debates that take us six or seven hours are limited to just three hours.

I cannot compete with the long service medals that have been paraded this evening. In comparison with 20 years or so of service, my three years on the Committee makes me a relative new boy. I was, however, taken by the speech of my hon. Friend the Member for Northampton, South (Mr. Morris), who spoke of the need to examine our procedures to see how they could link with the European Court of Auditors. The work of the PAC is subject to continual review and perhaps we should examine whether there should be a closer link with European methods of examining how various Government Departments work.

In the three years that I have served on the Committee I have seen various Departments and topics come round and round--I hesitate to say, like bad pennies. One issue, however, that does not come round time and again is the retail prices index, to which the hon. Member for Leeds, West has already drawn attention. I believe that it is some 10 years since it was subject to the scrutiny of the PAC. Apart from some criticism of the methods by which some information is collated--something that can be easily put right--the PAC noted : "The assurance of the Central Statistical Office that the basic framework of the RPI ensures an extremely robust indicator for measuring consumer price inflation."

It goes on to say, however, that it welcomes

"the consideration currently being given to the development of a statistical reliability model"

for the index and the efforts to develop

"a systematic methodology for assessing possible enhancements". That addresses the question whether the basket of goods representative of family spending four years ago is still accurate. It also leads one to question whether there is any regional balance or shopping types that should be taken into consideration. Perhaps the RPI should be targeted relative to the group to which it is applied. The obvious example is the pensioner whose weekly basket of purchases may not be identical to that of the average family. I do not wish to say anything further, but if we use an RPI on which

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decisions are made, it is appropriate that it relates to the group subject to those decisions rather than being a general index that may not be accurate.

The 29th report of the PAC concerns the Customs and Excise and specifically the disposal of drug smugglers' assets. I believe that that subject illustrates that constant dripping wears away the stone, as I first raised the disposal of drug smugglers' assets through Customs and Excise in the 22nd report of 1989-90. The response then was to the effect that the Treasury was not yet persuaded of the merits of the scheme, mainly because it did not think that it would be right that the resources devoted to drug smuggling

"should depend on an unpredictable and fluctuating level of proceeds from seizures"

and we were told that the discussions were continuing.

The matter having been re-examined this year, I am glad to note that it has moved on somewhat. The response now seems to be that Treasury Ministers have agreed to a scheme by which a proportion of the sums from drug smugglers' assets could be used in the anti-drugs context. We are told that, although 13 international confiscation agreements have been made, as yet no funds are flowing from the initiative. We can only hope that such procedures will be developed with the passage of time.

I appreciate the desire of the Minister to be cautious, wanting to proceed year by year. I hope that his efforts will be successful and will help to protect the youth of the country from the trafficking scum who would destroy it.

One of the most damning reports of the year was on the Energy Efficiency Office. Any body that sets itself up with such a title is leading with its chin, and I regret to say that we found little efficiency and not much energy. The report is damning because it questions whether the Energy Efficiency Office should have been in existence for the past five or six years. No targets were set, monitoring was suspect, to say the least, and there was no co-ordination among Departments to see whether there was any relative progress or whether best practice was spreading. The situation was summed up in a sentence in paragraph 10 of the report, which said, with that typical understatment that is part of the PAC's raison d'etre :

"we question whether the Energy Efficiency Office as presently constituted and run can secure the objectives set out by the Secretary of State and achieve value for money."

I read that to mean that it has been wasting its time, and nothing that came out of the evidence convinced me to the contrary. But in the belief that hope springs eternal, the Committee added : "We emphasise that we expect the Energy Efficiency Office to exercise close central direction and monitoring of the initiative and to provide advice to departments on best energy efficiency and practices."

That must happen if that office, which should be a vital organisation, is to have any purpose, and need exist, in the future. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) referred to the 31st report, entitled "Quality Control of Road and Bridge Construction", which links, in my view, with the 28th report of the previous year on the backlog of maintenance of motorways and trunk roads. Like other hon. Members, I raise the issue because of the main roads that run through our constituencies and cause grief and aggravation. My constituency is bisected by the M25, at times the largest car park in the United Kingdom. I share my constituents' anguish and aggravation because of their belief that they are paying the price for the sins of the forerunners in the Department of Transport.

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The saga of deferred maintenance continues. The problem was highlighted in the report of two years ago. Our last report showed more clearly that not sufficient attention had been given to design life and quality of maintenance. The hon. Member for Birmingham, Perry Barr (Mr. Rooker), a member of the Committee exposed the lack of quality of maintenance. I recommend hon. Members in all parts of the House to read his cross-examining on page 7 of that report. He highlighted two cases, one of plinth-bearing replacements and the other of spaghetti junction, where there were impressive overruns--if one can regard any excess of expenditure of public money as impressive--of taxpayers' money.

Although sanctions are available to the Department, there is a feeling that they are being used sparingly. For example, we noted that, despite the many failures in producing the correct level of support in exercising maintenance contracts, the reliance by the Department on the sanction of banning contractors or consulting engineers from tendering had been imposed only once in recent years and that few warnings had been issued. I suggest that the Department takes a tougher line when dealing with overruns on contracts and with faulty and shoddy work.

The right hon. Member for Ashton-under-Lyne took issue with the Treasury minute on design life and the relevant cost of quality improvement on initial installation. I support him in that. The matter remains unresolved. I fear that the saga will continue to run as the whole question of the maintenance and repair of roads and bridges returns for consideration by our Committee.

I shall not go over that ground again, except to say that I found it remarkably callous that the Department's calculations did not take into account the heavy cost of delays incurred by the travelling public and industry. We must treat the travelling public with the correct attitude because they pay for the maintenance that in turn pays for all the jobs connected with the Department. More consideration of those who use the roads would not go amiss. As I said, this whole debate contains a rich vein of information that need never run out in the time scale available to us. I have highlighted a few issues that are of importance and that I found interesting during the year. Other hon. Members have adduced their thoughts. I join others in expressing appreciation to our Chairman, the right hon. Member for Ashton-under-Lyne, for the gentle yet firm way in which he guides us. I am sorry that occasionally he finds it necessary to issue the 15-minute warning, but if he did not do so we should on many occasions not conclude our deliberations before midnight.

8.58 pm

Mr. Nicholas Brown (Newcastle upon Tyne, East) : Let me associate myself and my hon. Friends with the remarks made by hon. Members on both sides of the House about the late Ian Gow. Ian was cruelly murdered, and I condemn unreservedly both the murder and the murderers.

The Chairman of the Public Accounts Committee described Ian Gow as a valuable member of the Committee, and also referred to his hard work and wise counsel. He was an able parliamentary opponent. Following his resignation from the Government on a point of principle, he took a particular interest in Treasury

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matters, and was always available to bat for the Government side in our little skirmishes over taxation policies.

I shall miss Ian's contributions to Treasury debates very much. I found out that, as well as being a tough and formidable opponent, he was--as has already been said--a very kind and a very nice man. We are diminished by his death, and also by the manner of it.

I welcome the Financial Secretary to his new job. I hope that he is not offended by the level of attendance tonight ; it is actually quite good for the concluding stages of a Public Accounts Committee debate, and I am sure that that is a tribute to him. We have all come to hear his debut from the Treasury Front Bench. I welcome him on behalf of the Opposition, and look forward to hearing his contribution later.

Let me also express my thanks to the Committee for its work, as I have done in the last three Public Accounts Committee debates in which I have replied for the Opposition. I especially thank the Chairman of the Committee, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). The PAC is a hard-working Committee, but it is kept going by his diligence and enthusiasm as Chairman : that is very much appreciated. We also appreciate his approach to the work of the Committee--work that is considered, reflective and courteous, and brings about the unanimity that is so important to the integrity and power that the Committee's reports carry.

I congratulate my hon. Friend the Member for Leeds, West (Mr. Battle) on having got his hands on the Committee's papers, and also on being the only non-member of the Committee to take part in this debate. [ Hon. Members :-- "What about David Trimble?"] It seems that I am mistaken : the hon. Member for Upper Bann (Mr. Trimble) is also to be congratulated.

It was quite difficult to obtain copies of the Committee papers during the summer. While I realise that Committee members are familiar with them, if they were more easily available to those who do not serve on the Committee, perhaps other hon. Members would be more likely to take part in our debates. I rather agree with the hon. Member for Hertfordshire, South-West (Mr. Page) : if more hon. Members realised what a seam there is to tap, there might be a better attendance and a broader range of contributions.

I was sorry to learn that the hon. Member for Scarborough (Sir M. Shaw) is retiring at the next general election ; I wish him well in his retirement. He has been a regular contributor to our debates in this Parliament, and, if he is here for the next debate, I shall be able to wish him well again.

The Chairman described the Committee as a kind of "training scheme" for Labour Members from the 1983-87 intake who have gone on to take starring roles in our Front-Bench team. I am now something of an old lag : this is my fourth year of responding to these debates, and my third Financial Secretary. I do not think that I am wearing them down, as they have all gone on to greater things, and I am sure that the new one will as well.

There are certain recurring themes in these debates. The Ministry of Defence figures prominently this year, as it has previously ; so do the affairs of Northern Ireland. The issue

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of fraud is perhaps not quite as prominent as it was in the previous two years, but it nevertheless features in some of the reports.

There are two further issues that are defined not by Department or by type, but in a more general way. The first is the issue of public expenditure foolishly forgone, which is dealt with in several reports. I am trying to introduce the word "Lamontable" into the English language to describe such public expenditure foollishly forgone, and I shall continue to do so. The word has not been taken up yet but, with grit and determination, I shall manage to get it into the dictionary.

The other feature which becomes all too clear from the reports is implementation of Government policy clashing with the best interests of the public purse. That is especially noticeable in the reports dealing with privatisation.

First, I shall deal with the report on matters relating to Northern Ireland. The Chairman of the Public Accounts Committee took us all back when he referred to the report on the De Lorean affair. He then invited us to get inside one of those De Loreans and go "Back to the Future", to examine similar affairs.

Reference was made to the paving stone accident claims in Northern Ireland. Hon. Members may recall that there was a time when just about every house in Belfast seemed to contain someone who had fallen down and had a claim against the state for injuring their knees. The previous Public Accounts Committee report dealing with social security matters in the Province could have been mentioned. That report set out the problems clearly, but conclusions seemed to be a little further away. I notice that the Treasury response to that report was not very encouraging either.

Other issues that the Public Accounts Committee will have to consider in future will certainly include progress on the AOR1 contract, compared with the original promises made.

The hon. Member for Scarborough referred to the land registry in Northern Ireland, which failed to put up the fees to cover its costs. That is a simple problem, but it should have been picked up long before it was.

Another report before us today deals with plants and with microfilm. Although the sum of money involved is not vast when compared to sums mentioned in other reports, the word "astonished" is used--and that is strong language from the Public Accounts Committee. When studying all these issues, I found a key theme--it is supervision : checking and monitoring and intense and continuing audit. I suspect that that is not as easy to achieve in Northern Ireland as it is to say in a debate. I strongly support the hon. Member for Scarborough, who said that the tests that we apply to Northern Ireland should be no different from those we apply elsewhere in Britain. That is right but it is not easy, and the House should be aware of the difficulties while we keep that purpose firmly in front of us.

Before leaving the subject of Northern Ireland, it is worth referring briefly to the 30th report of the Public Accounts Committee about collection of the broadcast receiving licence fee--the BBC TV licence. It says :

"We are very concerned at the current level of licence evasion and regard it as unacceptable."

I suspect that that was also said back in 1985. The report goes on to point out :

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