House of Commons Hansard Debates for 17 Oct 1991

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We were worried about the risk of companies seeking to avoid their compensation liabilities by going into liquidation and later re-emerging as new companies and continuing to operate in the docks. We say in the report :

"We therefore expect the Department to continue to be vigilant in their checks to ensure that owners of liquidated companies do not set up successor companies so as to benefit from the provisions of the Act."

Finally, we state ; "We are disappointed"--as indeed we were-- "at the very small amounts of compensation recovered under the liquidation arrangements."

Our conclusion, as I said at the beginning of my comments, was this :

"The Committee has repeatedly called for full quantitative assessments of the objectives of the programmes so that, wherever possible, they can be compared with their achievements. We are therefore surprised that the Department had not previously started to collect the necessary data for a thorough review of the effectiveness of the abolition of the Dock Labour Scheme. We note that they now propose to do so."

That should have happened in the beginning. The time to decide how effective public expenditure can be is when one decides to set up a scheme to spend public money. We continue by saying :

"We expect the findings of this review to be published in due course and the results notified to Parliament."

I note that the Treasury Minister said that consultants have been appointed to discuss the consequences of abolition. It is a pity that that was not done at the outset.

The seventh report concerned the monitoring and control of charities in England and Wales--a most important and valuable investigation which we carried out some years ago. We discovered that the running of the Charity Commission was archaic. There is a new charities commissioner and a new system has been set up and the Committee wanted to discover how they were getting on.

We note that there are now a few accountants around. When we first considered the subject there was very little in the way of accounting controls and no computers and since their task was to examine accounts, there was hardly any means for them to do so, let alone spot fraudulent charities. There is much more accountancy provision now, but there is a long way to go and we look forward to the improvements filtering through.

The great advantage of the Public Accounts Committee is that we do not merely deal with matters where something has gone wrong or where we think that things might be improved. We come back to the same subjects again and again if we are not satisfied with the actions that have been taken. Charities are an example, but the same applies to all our reports.

After producing a report we receive a Treasury minute. It comes via the appropriate Department, but is analysed by the Treasury and then comes to the Committee and to Parliament. In the minutes we are told what is being done and how our comments and conclusions were regarded. The minute usually suggests some action and we take note of it. We keep a control on such matters and within a year or two we find out what has happened as a result of the changes that have been made. If things have not gone as well as we had hoped or there have been some fundamental variations, we can call back some of the people involved to explain the problems. That is the way in which we retain a continuing interest in the matters that we discuss.

Another report was on the new ship for St. Helena, which cost a lot of money. A major problem was that the

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shipbuilder used the advance payment from the Overseas Development Administration to provide a guarantee. That is unbelievable. The shipbuilder was asked whether it had sufficient financial standing to complete the order--hon. Members may remember there was some doubt about it--and it pledged the advance payment to show that it was in funds and financially viable. Obviously, that should never happen. One cannot use money from one Department as a pledge to another. We are supposed to be one Government acting together.

Another problem was the choice of shipbuilder. I understand why the Scottish Development Agency was very much involved. However, we must distinguish between moneys given for sensible regional and national purposes and moneys given because we feel that a certain bid is the most competitive that we have received. There was a blurring of the two which we should want to be distinguished in future.

The 16th report was on fire protection and the Donnington fires. In 1983 there was a fire at Donnington which cost us £169 million. Five years later another fire in the same place cost £180 million. How can that be when they had five years to learn some lessons? Unbelievably, sprinklers had not been installed. Our comments on that subject were very strong indeed. The important fact to emerge is that if the Government had been a private organisation it would have had to insure the property against fire and would have received a letter from an insurance company to the effect that it would be happy to quote for cover, but would send its men along to inspect the premises and say whether they were able to cover them. When they came along they would have pointed out that sprinklers had to be installed. Government Departments do not have to bother because they can raise the money from the taxpayers. That is sensible in many ways, but Government Departments should maintain the disciplines that an insrance company would provide to a private organisation. That is where the Department failed wretchedly and we shall be examining that matter again.

The 32nd report examined the chief inspector at the Department of Health and Personal Social Services in Northern Ireland. We found out that the Department had delegated some of its responsibilities. I understand that and respect the fact that there is a good case for such delegation. However, a number of aspects of the matter were not fully known by accounting officers.

The chief executive of the Department of Health and Personal Social Services said that the matter was for one of the four authorities in Northern Ireland. We were unable to accept that. We realise that there should be delegation. Nevertheless, we believe that there should also be some responsibility and an accounting officer must be able to account for those areas of responsibility. We said that we would expect detailed answers and we hurried out our report. I am glad that we have now received a response showing that more will be made available to us in the future. That is important. We cannot exempt expenditure on the basis of others being satisfied that their subordinates are doing what is expected of them. We must have the information and be satisfied ourselves.

Finally, our 35th report deals with NHS out-patient services. We were concerned here about the quality of service--the ability to measure standards and targets. Expenditure can be related only to the performance of certain activities, so we must find a way of measuring standards and targets. Waiting time comes into that along

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with the status of fund holders and non-fund holders. We look forward to seeing a greater concentration on some of those activities so that we can compare like with like. In other areas where responsibility is delegated, that will become even more important. Finally, I wish to thank the Committee, which is the

hardest-working Committee in the House. Anyone who knows anything about civil servants knows full well that we have a mountain of paper from them. One of my pleasures is that my colleagues nearly always spot things that I have overlooked, for which I am grateful. It means that we have a properly functioning body which works and acts on behalf of Parliament and for which the House needs to be grateful. 5.11 pm

Sir Ian Stewart (Hertfordshire, North) : In recent years it has usually fallen to my hon. Friend the Member for Scarborough (Sir M. Shaw) to follow the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) to speak on behalf of Conservative members of the Public Accounts Committee and to thank him personally for the great contribution that he makes to the working of that Committee. I am one of the most junior members of the Committee and it has been an extraordinary experience being a member of the Committee even for a matter of months since the beginning of this year. I deeply regret the circumstances which led me to join the Committee ; I filled the place once held by my honourable and close friend Ian Gow, and I well understand how much the Committee misses his contribution-- intellectual, forensic and personal.

The weight of work which the Committee has to handle has not been overstated by the right hon. Member for Ashton-under-Lyne. On the table before us we see only the reports, not the drafts, transcripts, National Audit Office reports and all the related paperwork which come to the Committee. I suspect that I am not the only member of the Committee to have spent a large part of the summer recess sorting through piles of paper relating to the Committee and trying to get them into some sort of coherent order.

The right hon. Member for Swansea, West (Mr. Williams), who has a room in the House not all that far from mine, has a horizontal filing system for his Committee papers and it is sometimes difficult to get into his room to have a word about what we are talking about in the Committee.

In all seriousness, however, I want to express my appreciation of the work done by the Chairman and by my fellow members and colleagues on the Committee, many of whom have served on it for a considerable number of years and whose experience and expertise are invaluable. I often feel rather amateur when I listen to the extraordinarily pertinent lines of questioning that they are able to develop. I hope that such experience and skill will come with time.

We are all grateful, too, to Sir John Bourn, the Comptroller and Auditor General, to the staff at the National Audit Office, and to the Comptroller and Auditor-General for Northern Ireland for their work not only on behalf of the Committee and the House but on behalf of the public at large. Theirs is not a function which is as well known as it ought to be, but it seems to me to be one of the most important and responsible functions in

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British public life that there should be an effective means of keeping control over the way in which taxpayers' money is spent. That is perhaps the Committee's greatest strength. Unlike departmental Committees, as is well known to members of the Committee but perhaps not so fully understood beyond these walls, the Public Accounts Committee has traditionally concerned itself not with the policies which have led to the public expenditure but with the way in which the money is spent once those policy decisions have been taken. It is extremely important that at least one Committee of the House should be able to look in such a dispassionate way with an entirely practical application to see where taxpayers' money is going. It is a strength of the Committee that that very fact reduces, if it does not entirely eliminate, the usual party political dimension which is so often bound to enter into our considerations in the House. It is also a strength of the position of the National Audit Office and of the Comptroller and Auditor General that he knows that that is the basis on which he is reporting to our Committee.

If the results of our Committee's reports are then taken up by other Committees or by the House, that is fine, but the process of auditing and checking that auditing and of making that auditing process accountable to the House through the Public Accounts Committee is an extraordinarily valuable aspect of the work of Parliament. The public service would be far less responsible, and accounting officers would have much less cause to ensure that they were conscientious about using public money, were it not for the fact that that process exists. They appear before the Committee frequently and know that they will be held to account by those who will be fearless in asking them questions about how they are using the money that we raise from the British public in taxes.

I was particularly glad that the right hon. Member for Ashton-under-Lyne referred to Sir Peter Levene, whose appointment and the improvements in defence procurement that he introduced illustrate how valuable it can be to introduce into the public service those with a greater knowledge of the operation of the commercial world. I think that it is fair to say that that appointment was pretty heavily criticised when it was originally made, but I agree with the right hon. Gentleman that Sir Peter's performance triumphantly justified his appointment and has saved the country a great deal of money. The repeated sessions that he had with the Committee, many of which took place before I joined it, showed how a Department could benefit from the direct application of commercial skills and understanding of the kind that he brought into it.

Lest my comments seem hypocritical, I should say that it was as a result of a meeting that I had with Mr. Levene, as he then was, when I was an extremely junior Minister in the Ministry of Defence in 1983 that I suggested that he should meet the then Secretary of State, and from that his appointment flowed. I was led to make that suggestion because I was at that time concerned about the way in which the Ministry of Defence appeared to take on trust too much of the information fed to it by firms in the private sector. Unless such firms had, as it were, someone

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from their own culture to deal with, it was unlikely that the Ministry of Defence would be getting good value for money from its large budget.

Mr. D. N. Campbell-Savours (Workington) : Could not that argument be extended to health service procurement ? We understand that the Department has made changes in the arrangements for the procurement of NHS supplies. Is there not an argument for appointing someone from the private sector to introduce into health service procurement the same climate to which the right hon. Gentleman refers ?

Sir Ian Stewart : In principle, the assumption should be that such an arrangement would be welcome in whole areas of Government or Government- funded activity. I see no reason why health services should not be among them, for the reason that the hon. Gentleman gave.

The impression that I have gained from my relatively brief membership of the Committee is that many of our inquiries raise not only particular points about the Departments concerned but general points of principle having a wider application.

One or two of the cases that we examined illustrate those wider issues. My first example concerns the new British library building, to which the right hon. Member for Ashton-under-Lyne referred. The 18th report, which was published on 8 May, is a remarkable document. I was not a member of the Committee when that evidence was taken, but once I began reading the report during the summer recess, I could not put it down. I was astounded at the sequence of events that it revealed. If it is not a sell-out in the Vote Office, it ought to be. It should be required reading for all right hon. and hon. Members. The new British library building is a lengthy project that has spanned different Governments, agencies within Governments, and Departments. It is a horrendous story. The new building was conceived in the 1970s and it is due to be completed by 1996. It will, however, bear no relation to the original concept. It will be much smaller, and because only certain phases will be completed, there will not be a coherent complex of buildings as was originally conceived. The project will cost about four times as much as was estimated, and although inflation accounts for part of that, it will not account for all of it.

Instead of providing three times as many seats for readers, the new building will offer only about 70 more places. Nevertheless, it is described as the biggest civic building project in Britain in the 20th century. Any construction project spread over 15 years is almost bound to get into a tangle. Technology, central heating arrangements, and other aspects change over 15 years, so that by the time of completion the project does not remotely resemble the original plans.

The building will be able to accommodate only material up to 1996, instead of up to 2030--which shows that if one leaves a project too long, it is overtaken by events and finishes up not serving the purpose for which it was conceived.

Part of that situation is due to the original concept, but it is largely a question of the way that the project was undertaken. The original concept of a huge complex of buildings was in itself questionable. When it was first mooted many years ago, I remember wondering, then as a member of the Opposition, whether it was necessary to have anything so grandiose. The 18th report makes reference to a great auditorium, but one does not go to a

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library to sit in a 260-seat auditorium or to take a meal in a resplendent restaurant. There are masses of restaurants in the King's Cross and St. Pancras areas of London, and the capital is full of under-used auditoriums, yet a huge part of the new building's available space was designed for purposes not directly relating to that of a library.

When public funds are committed to such a major project, they should be devoted to the central purpose and not spent on a lot of peripheral purposes that can up-end the whole scheme. Even though, I am embarrassed to say, I was a Treasury Minister at the time the project progressed under a Conservative Government, I cannot see what role the Treasury was playing in the 1980s in its scrutiny of the process by which the project staggered forward from year to year. The right hon. Member for Ashton-under-Lyne pointed out that the steering committee did not meet for three and a half years at a critical point. I was not the Treasury Minister responsible for public spending, but I do not suppose that the Chief Secretary to the Treasury at the time knew what was happening--I suspect because responsibility appears to have been shared by at least two main parties. They were the Office of Arts and Libraries and the Property Services Agency. Each competed with the other to avoid taking responsibility for overall control of the project.

The lesson to be learnt is that responsibility for the progress and costs of any significant project must be defined. The Treasury must know who is responsible, and keep its own tabs on the project to ensure that it is progressing properly. In the case of the British Library, there was not just weak management but a lack of management. Until the project was pulled together more tightly three or four years ago, it was allowed to progress without the central control one expects to see applied in respect of a venture that is not only an important part of British life but a major expense to the British taxpayer.

I do not understand why it takes such an enormous amount of time to construct such a building. The longer one takes to complete such a project, the more likely it is that its costs will overrun due to specification changes and the incorporation of new ideas that one interest or another wants to introduce. The whole process then becomes more diffuse and less controllable. We shall end up with a library that does not perform the function for which it was designed, and which will cost a great deal more than it should have done--though it may be quite an agreeable place to have lunch. I cannot believe that is what was intended .

The national health service is a mildly topical subject at the moment. Like many other agencies and services that receive Government money at various removes, the NHS is liable to throw up extraordinary stories of a lack of basic management perception. We took evidence, following the report of the Comptroller and Auditor General, about the use of operating theatres. Some of the information that came to light suggested that even in respect of an important and central element in a major public facility such as the national health service, basic and sensible rules of management may fail to be implemented.

In this case we learned, for example, that operating theatre time was frequently wasted because patients did not turn up. I suppose that it is not surprising that patients sometimes do not turn up. Some patients may forget or some may be afraid of turning up for their operation, rather as one is before going to the dentist. A patient may

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not be well enough to turn up, may have got better and therefore not need to turn up, or may have moved. There are all sorts of reasons why those scheduled for an operation may not turn up at the right time.

Yet in many cases hospital staff had not even checked with patients that they intended to attend for their operation, even if notice had been given many weeks or months before. A great deal of valuable time will inevitably be lost if accurate lists are not maintained and attendance is not checked beforehand. The simple process which most hospitals adopt is to seek positive confirmation that patients intend to turn up, keep the lists up to date, and keep a list of patients who would be available at short notice if unexpected vacancies arose. But the report says that for one type of surgery in one district almost half of the names on the list could be deleted.

Such inquiries show that there is a long way to go in many of the services which take a substantial part of the national budget. The same could be said about many other aspects of the national health service, but that illustrates again the need at all levels to have not only competent financial management but competent common-sense management of the way in which facilities and resources can best be used.

Mr. Tim Smith (Beaconsfield) : Before my right hon. Friend moves on to the next report, will he refresh the memory of the House? Did not the report also suggest that some operating theatre sessions were cancelled because of the failure of consultants to turn up? If so, does he agree that if we are to have improved systems, they should also apply to consultants? If in other professions even the most senior partners regularly have to complete time sheets and account for their time, there is no reason why consultants in the NHS should not also be required to account for their time.

Sir Ian Stewart : My hon. Friend makes a fair point. That applies at all levels and in all functions in public services of this nature. The lines of accountability and responsibility are often not clearly set out in hospital management structures, so some things are not controlled in the way they should be. It is also true to say that because hospitals have such widely different practices the amount of detailed information available to the Department of Health about the way in which things are done and how it could encourage certain standard procedures which would improve the use of resources has not advanced as far as it might otherwise have done.

The last of the reports to which I wish to refer relates to the Foreign and Commonwealth Office accounts which, as the right hon. Member for Ashton- under-Lyne said, came in for a swingeing qualification from the Comptroller and Auditor General. Well might they have done so, because the story of what happened in the Foreign Office about reconciling its accounts during a period when it was changing its computer system is again something of a horror story. The old system had no back-up. As a result, when a new system was being installed and ran into serious teething troubles and the old system happened to pack up during that transitional period, there was simply no means of identifying what the accounts should be. The appropriation accounts report for 1989-90 says :

"for March 1990 there was a difference of £485 million between the Parliamentary Grants recorded as drawn and the sums shown in my records as released from the Consolidated Fund."

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That is a huge figure. The same document says in paragraph 36 : "The results of my enquiries led me to conclude that the system of control over suspense accounts had broken down to the extent that no reliance could be placed on the records maintained within the accounting system."

That is a fairly dramatic comment by a person charged with auditing the accounts of one of the great Departments of State.

One of the problems seems to have been that the permanent under-secretary was not informed nearly soon enough of what had been going on. The passage that I quoted related to March 1990, yet he was not fully informed about what was going on until the end of July that year. It seems that there was a failure of a line of management responsibility. I am not pointing the finger at the permanent under-secretary personally but the example illustrates how the civil service head of a Department of that nature, despite all the major preoccupations that he may have about policy and other matters, must know what is happening. In view of the rapid pace at which foreign affairs have moved in recent years, it is not surprising if the permanent under-secretary had many preoccupations. Nevertheless, he is the accounting officer. His opposite numbers in other Departments carry the same considerable responsibility as him and they must have in place a structure of support from financial managers and comptrollers within their Department who can make sure that such failures do not occur and who can, if things begin to go wrong, warn them properly at an early stage.

Whether in the private sector, an industrial company or in government, anyone with overall responsibility would far rather know when things begin to go wrong than wait for many months or years until things have become much worse and the problem causes a great deal more difficulty and cannot be put right without a great deal more fuss and trouble.

In the case at the Foreign Office there was a gross failure of general record keeping. Those who were put into the accounting department appear to have been inexperienced. They appear to have been put there not because they had an aptitude for the work but because they happened to be in London for a year or two between foreign postings. It is the responsibility of the heads of such departments to ensure that the people entrusted with responsibility for the accounts and for keeping tabs on expenditure are sufficiently skilled and familiar with such work and can ensure that a complete breakdown of accounting systems does not take place.

If one has a reasonable system, it ought to be possible to reconstruct the accounts even if the accounting method collapses. If one has the right paperwork and it has been correctly recorded and filed, although it might involve a great deal of work, one should be able to reconstitute the accounts after a period. In this case, even that was not possible and disqualification of the accounts had to take place.

I hope that disqualification will not recur in the Foreign and Commonwealth Office, and I hope that it will not be repeated in other Departments in anything like a similar way. It is a salutary warning of what can happen if the accounting officers do not make themselves continuously aware of problems that may arise in the management of their figures.

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Mr. John Wilkinson (Ruislip-Northwood) : What sanctions would Parliament impose in such cases? It is all very well lamenting over lapses of accounting that have occurred, and this example seems to be particularly lamentable, but unless at the end of the day Parliament enforces sanctions- -or induces the Government to impose sanctions--on those responsible for negligence, we shall not move any further forward. Can my right hon. Friend elucidate that aspect?

Sir Ian Stewart : I am not sure that I can, but I am aware of the problem that my hon. Friend raises. In the private sector the chief executive or the finance director, or both, of a company that finds its accounts in that condition would not survive in post. It would not be wise to adopt that approach to the same sort of situation in the public service because, as I said, there are many other dimensions. Those responsible have many other areas of duty besides the financial one.

Perhaps there should be something more comprehensive from this House than the report of the Public Accounts Committee by way of an expression of unhappiness and criticism if something goes as seriously wrong as happened in this particular case. I hope that by placing the matter on record in this debate we make it clear as Members of this House, as opposed to just members of the PAC, how seriously we regard it that one of the great Departments of State could allow its finances to get into such a terrible and irretrievable mess. I hope that the lesson has been learnt and that we shall not have to dwell on such cases in future.

I should like to conclude by saying just a word about the role of the PAC. I have confessed to my own relative inexperience. In the short time I have been a member of the Committee I have been struck by the value of the relationship between the National Audit Office--the Comptroller and Auditor General--and the PAC. It is against this background that I noted with some anxiety the report of the Select Committee on Procedure on the NAO and PAC. The Select Committee said of that relationship :

"it would be regrettable and detrimental to the interests of the House, if it ever came to be seen as an exclusive relationship." It went on to say that it had sympathy with the proposal that where a particular departmentally-related Committee had an obvious interest, a report from the NAO could be taken up by that Committee instead of the PAC. My right hon. Friend the Lord President of the Council has responded with several comments to those suggestions. I should particularly like to draw attention to his remark that :

"The Government sees no constitutional objection to the NAO having a relationship with other committees, provided that the nature and scope of the NAO's work, and its relationship with the Government, remain unchanged."

The relationship between the Comptroller and Auditor-General and the Department whose affairs he would be investigating would be likely to be altered if he felt that he was accountable to other Committees which would follow a different tack from the PAC's concern with value for money, efficiency and the proper expenditure of money, rather than with policy issues. Inevitably, in discussing with Departments the information that he would include in his report, he would be influenced. He has told us that he feels that the Departments would be influenced in the way in which they handled that relationship. A stronger case would need to be made out for a change of the type suggested by the Select Committee on Procedure before we

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should let go of the considerable advantages inherent in the present arrangements. That is my view as a result of my brief experience of the PAC, but I believe that it may be shared.

Mr. Robert Sheldon : In the subsequent debate I followed exactly the course that the right hon. Gentleman put forward, and the Chairman of the Procedure Select Committee, the hon. Member for Honiton (Sir P. Emery), explained that the PAC would have an effective veto over those areas and examinations that should be carried out by other Committees. It would be impossible for a Committee to carry out the work that we do and it would be impossible if we were both to deal with the same particular report. All those propositions were accepted.

Sir Ian Stewart : I was about to refer to that, but I am glad to have it from the Chairman of the PAC.

From time to time it may appear as though there are advantages in opening up more widely the work of the NAO and the Comptroller and Auditor General. For the time being the effective veto, as the right hon. Gentleman described it, will preserve the position satisfactorily. From fairly limited experience of the work of the Committee it is my impression that the present arrangement is a satisfactory one which should not be altered without much better cause than has so far been demonstrated.

5.45 pm

Mr. Alan Williams (Swansea, West) : I start by making a personal investment in the next Session of Parliament and congratulating my right hon. Friend the Member for Ashton-under Lyne (Mr. Sheldon) on the way in which he has chaired the Public Accounts Committee. We all have great admiration for the way in which he carries out that role. This Saturday many thousands of people will congregate at football grounds around the country, but they will not realise that the Chairman of the PAC was the originator of the yellow card system. One yellow card is a warning, and the second sends one off. I must confess to the right hon. Member for Hertfordshire, North (Sir I Stewart) that, in the vertical extension to my horizontal filing system to which he kindly referred--I shall gladly display its merits to any hon. Member who can get in through the door--I have, sadly, a pile of yellow cards from my right hon. Friend nearly as high as the pile of National Audit Office reports.

Like the right hon. Gentleman, I am a relatively new member of the Committee. It is 22 years since I last served on it, and this is my first full Session. I have found fascinating the diversity of the issues that we have investigated. It is a genuine tribute to the diplomatic skills of my right hon. Friend that, despite the diversity of the subjects and the attitudes of the members of the Committee, every time he manages to produce a consensus report.

More often than I would wish, I have been shocked by the sloppiness and incompetence of the cases before us. I want to deal briefly with one case of what I feel is a cavalier attitude to the disbursement of the best part of £1 billion in tax concessions over the past decade, two failures to account properly to the House almost verging on contempt of the House, and one major financial failure which, even more important, revealed a gamble with national security.

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As an aside before starting on those cases let me say that I was somewhat disappointed to find, when recently we looked into hospital waiting lists, that the chief executive of the National Health Service Management Executive, Mr. Duncan Nichol, was unaware, until I gave him and the Chairman evidence in the form of brochures, that private health schemes were offering immediate treatment--I underline immediate--in more than 400 NHS hospitals, many of which were the subject of our investigation because they had abnormally long waiting lists. I would have been more impressed with Mr. Nichol had he shown more evidence of being on top of the job.

The first issue with which I wish to deal concerns the way in which Customs and Excise administers the beer duty, and in particular the 6 per cent. concession allowed to the brewers for wastage. Every year since Gladstone-- for over a century--the brewers have enjoyed a tax allowance of 6 per cent. of their beer production as being waste product. That tax concession is now worth £125 million a year. In fact, when we explore the figures more carefully, we discover that the British public have been ripped off to the tune of £50 million a year by the eight major brewers in each year over the last decade. In other words, those brewers have had virtually £0.5 billion to which they were not entitled.

Indeed, a report that we received on the subject from the National Audit Office said that it could not obtain evidence from brewers' records. That was hardly surprising. But one brewer played the nark and apparently co- operated with the NAO, and in paragraph 2.18 of that report we were told :

"One large brewer estimated his average losses at below 3 per cent."

In other words, one large brewer reported that he was getting more than double the tax rebate to which he was entitled.

Of the £125 million given in tax rebates to the brewers, 80 per cent.- -£100 million--goes to the eight biggest brewers. Because that one case might be thought to be one off, we must examine the evidence of the Brewers Society. Could it have been one off resulting from a technological advantage possessed by that one brewery using the latest techniques to avoid and reclaim waste? The Brewers Society said in paragraph 2.27 of its statement that it considered "that, because all brewers used much the same technology, use of an average wastage rate was not inequitable as between one brewer and another."

That organisation was speaking for the eight big brewers such as the one which reported that it was receiving double the tax rebate to which it was entitled.

All the big brewers, on the admission of the Brewers Society, are employing the same technology and must therefore be achieving the same savings. The result is that, last year and the year before, the eight big brewers received £50 million to which they were not entitled, and if that tax rebate were sustained over the whole decade, it would amount to £0.5 billion.

The Department was hardly over-concerned about the matter, and when I asked Sir Brian Unwin about it, he said :

"I do not believe the present system is fair, no."

That seemed at least to be a concession, and I thought that at last we were getting action. But disillusion quickly followed, when he aded, again in reply to a question from me :

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"We have had external compulsion from Brussels and we have now decided to change the system".

So the £50 million a year rip-off by the brewers--which are now, instead, ripping off those who run their pubs--might have been continuing had it not been for the intervention of Brussels. The next issue I wish to raise concerns the privatisation of Harland and Wolff. Paragraph 4.1 of the report by the Northern Ireland Office said :

"The Government's intention to return Harland and Wolff to private sector ownership was announced to Parliament on 29 June 1988." Observing the proprieties of the Committee, I am not talking about whether it should have been returned but what happened in relation to accountability to this House after that decision had been taken. The paragraph continued :

"In a statement to the House of Commons on 22 March 1989, the Secretary of State reported that he had approved Heads of Agreement for the sale of Harland and Wolff In his statement, the Secretary of State only detailed in financial terms the assistance to the new company The statement outlined the main"

I emphasise "main"--

"financial provisions of the Agreement ; the investment of £60 million in repayable unsecured loan stock and grant aid of £38.75 million the Secretary of State also referred to arrangements for existing ship contracts recourse facility responsibility for liabilities and intervention aid. The statement did not, however, quantify the cost of these particular aspects of the Agreement, nor have details been reported subsequently to the House."

It is two and a half years since the Secretary of State gave the House the impression that the main financial cost of privatising Harland and Wolff would be £98.75 million. Yet appendix 3 to the Northern Ireland Office report shows that, in addition to that sum, another £522 million was involved. In other words, over five times as much was involved as had been reported to the House. The eventual cost, instead of being £98.75 million, was £624.8 million--more than a slight oversight, and more than a slight neglect of accountability to this House. It is a major criticism of the Northern Ireland Office that the figures were not willingly and readily produced to the House.

I genuinely wish that that had been one off. Regrettably, my next example also applies to the Northern Ireland Office and also relates to a privatisation venture. In a statement to the House on 7 June 1989, the Secretary of State reported that he had approved heads of agreement for the sale of Shorts to Bombardier, and gave details of the cost implications for Government. They were summarised in appendix 3 to the Northern Ireland Office report by the Comptroller and Auditor-General on the sale of Short Brothers, except for additional items that were listed in the final section of the report. Those additional items amounted to £236 million, and they were not mentioned in the statement.

No reference was made in the Secretary of State's statement to the retention by Government of Shorts' sales financing liabilities. That was a mere £142 million, as so far costed, and that cost could increase between now and the year 2040. However, that was subsequently brought to Parliament's attention on 20 July 1989, when approval was sought for the additional expenditure required for privatisation. I have here the statutory instrument--the Appropriation (No. 3) (Northern Ireland) Order 1989. I

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invite anyone to read that order and find in it any suggestion of, for example, the £142 million that was not mentioned in the initial statement to the House.

In a speech to the Committee about additional funding, the then Under- Secretary of State for Northern Ireland said :

"The Government will also retain the financial liabilities and obligations associated with aircraft sold in the past by Shorts under financing deals." --[ Official Report, Third Standing Committee on Statutory Instruments, &c., 20 July 1989 ; c. 4.]

That is all he said. There was no quantification, no spelling out of the £142 million.

That took place at 10.30 in the morning. That afternoon, after failing to give the detailed information to the Committee, in a written answer to my hon. Friend the Member for Bradford, South (Mr. Cryer) the same Minister said :

"I refer the hon. Member to the answer I gave earlier today to my hon. Friend the Member for Beverley."--[ Official Report, 20 July 1989 ; Vol. 157, c. 279. ]

Now we must see what happened at 2.30 that afternoon, after the issue had gone before the Committee dealing with the statutory instrument. We all understand that, when a Minister prepares an answer to an oral question, until he stands at the Dispatch Box he can be sure only that he will answer the substantive question. If a Member is not present, only the substantive reply will appear in Hansard. There will be no supplementaries ; the question is passed over.

That same afternoon, the Secretary of State for Northern Ireland was asked by the hon. Member for Beverley (Mr. Cran)

"if he will make a further statement on the privatisation of Short Brothers plc."

The substantive answer, again from the Parliamentary

Under-Secretary, was :

"Since the announcement on 7 June of heads of agreement whereby Bombardier of Canada will acquire Shorts, good progress has been made on the necessary legal documentation. I am pleased to inform the House today that approval to the terms of the transaction has been given by the European Commission. It is our intention to complete the transaction in September."

There was still no reference to the additional factors implicit but not explicit both in the statutory instrument and in that morning's Committee proceedings. In answering a supplementary question--his diligent hon. Friend was there to ask the supplementary--the Minister said that the cost of the transaction would be some £750 million. That is the very figure originally given when the extra costs were not admitted.

Those are two cases in which the Northern Ireland Office has failed to tell the House of extra expenditure involved in privatising firms within its remit. In one instance, those extra costs were more than £500 million and in another they were more than £140 million. That should be a matter for great concern to hon. Members on both sides of the House.

Finally, I come to the most incredible report that I have seen either in my original spell on the Public Accounts Committee or in my more recent spell. My right hon. Friend the Member for

Ashton-under-Lyne referred to the affair. It concerns the Ministry of Defence, and fire protection at main store depots. If these events were written down as a story, it would be regarded as fatuous ; no one would believe that anything so idiotic could have happened.

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