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Mr. Maude: He would not have phoned the Chancellor.
Mr. Loughton: Wonders will never cease. There has been yet another shift in alliances within the Government.
Only 18 per cent. of the United Kingdom economy is involved in Europe, but 100 per cent. of British business, industry, shareholders and taxpayers will have to pay the cost of a highly expensive, but uncosted, contingency changeover plan. We are always promised cost assessments, but the absence of one for the plan is stark. It is amazing that, before they deal with any of our EU problems--the common agricultural policy, fraud in the Commission, our rebate, the withholding tax, unfair tax competition that penalises our enterprises, and much more expensive social costs--the Government are trying to commit the British people to enormous and unlimited expenditure, although even the Prime Minister has doubts about which side of the fence to come down on.
It is bad enough to be asked to write a blank cheque and to open up a funding black hole. It is worse still that the bank account holders--the British people--are not
allowed to know the amount to be written on that cheque, when it will be written or for what it will pay. I do not share the confidence of my hon. Friend the Member for Mid-Worcestershire (Mr. Luff) because I think that the Government are hiding something. Transparency is the best regulator.
Mr. Luff:
I know that it is not the custom of Hansard to put "irony" in brackets after our comments, but I hope that mine were heavy with it.
Mr. Loughton:
My hon. Friend spoke so subtly that I did not wish to disrupt the bonhomie that he engendered across the House.
Transparency is the best regulation and the best measure of accountability. The amendment does not deal with the whole issue of the euro, but simply seeks accountability and the ability to hold Labour Members and the Government democratically to account on behalf of our constituents. The changeover plan is purely a contingency plan, but potentially the most expensive contingency in history. We should have none of it.
Ms Hewitt:
It is fair to begin by saying that Conservative Members have livened up somewhat during this debate. Indeed, we have heard from almost every Conservative Member present, except of course the hon. Member for Grantham and Stamford (Mr. Davies). It is hardly surprising that he has remained completely silent on the issue.
Once again, the debate has shown that the Conservatives are indeed a single-issue party. It would appear, at least this evening, that they are a single-sex party too. We have heard a great deal of nonsense this evening in an attempt to whip up some excitement on the Opposition Benches.
Mr. Luff:
At least we Conservatives are here in numbers to discuss one of the most important issues that faces the United Kingdom, unlike Labour Members.
Ms Hewitt:
I do not think that we need to worry about the numbers this evening.
The nonsense that we have heard from Conservative Members started with the right hon. Member for Horsham (Mr. Maude), who accused the Government of asking Parliament to give us a blank cheque to spend--a phrase with which Conservative Members were clearly so impressed that several of them repeated it. That is complete rubbish. Clause 122 establishes the propriety of expenditure by Customs and Excise and the Inland Revenue on preparations for the possibility that the United Kingdom might join the single currency. It does not remove Parliament's right to scrutinise the expenditure, or the requirement for Parliament to give legal authority for such expenditure each year through the annual supply estimates and the Appropriation Act.
It might be helpful if I remind hon. Members that statutory authority for the payment of expenditure out of moneys provided by Parliament must be given each year and can only be given each year by the supply estimates and confirming Appropriation Act. Any expenditure by the Government on euro preparations, like any other expenditure out of moneys provided by Parliament, will
have to be authorised each year by Parliament in the annual Appropriation Act, which provides the legal authority for the expenditure.
Mr. Maude:
If that is the case, will the Minister undertake that the House will have the opportunity to debate separately the sums allocated for that line in the Budget?
Ms Hewitt:
We will treat it like every other line in the Budget. I am surprised at the right hon. Gentleman. He did not refer to the constitutional practice that was enshrined in the 1932 concordat between the Treasury and the Public Accounts Committee. I assume that as a former Treasury Minister he is familiar with that concordat. It is a rule of propriety that continuing functions of Government, in particular when they involve financial liabilities that extend beyond a given financial year, should also be defined and covered by specific statutes. It is in accordance with that rule of propriety that clause 122 provides specific statutory authority for expenditure on euro preparations.
Mr. Maude:
I take it from what the hon. Lady says that the answer to my question is no, the House will not have such an opportunity. If she cannot supply that and as she claims that this is not a blank cheque for the Government, will she tell us what number will be on the cheque? How much money is she proposing to spend? If she does not know, she has the Chancellor at her side--he seems to have come to life--and she should ask him.
Ms Hewitt:
I shall come to the figures for expenditure in a minute. As I said, expenditure on that matter will be treated in exactly the same way as any other expenditure from moneys authorised by Parliament. Perhaps it is not surprising that the right hon. Gentleman, who is Maastricht man--the man who signed the Maastricht treaty on behalf of the previous Government--wants to divert attention from his record by his obsession with clause 122.
I shall spell out the procedures once again because the right hon. Gentleman and his colleagues seem to have forgotten them. As with all expenditure incurred by revenue Departments, Parliament votes through estimates. Forecasts of euro preparation expenditure would be included in those estimates. The annual appropriation accounts report the actual outturn against the figures projected in the estimate and those are laid before Parliament in the January following the end of each financial year to which they relate. Moreover, the annual departmental reports, which are laid before Parliament around the end of March, provide a backward look to the previous financial year as well as a forward look to the coming financial year and expand on the detail contained in the estimate and appropriation account. I remind the House of that because so many right hon. and hon. Conservative Members seem to have forgotten it.
There are three main reasons for pre-referendum spending in the Revenue Departments.
First, unless we undertake the necessary practical preparations, the United Kingdom will not be in a practical position to join--even if that were in the national economic interest. That is especially true of the Revenue departments, whose computer systems are among the largest and most complex in Europe.
Secondly, if the UK were to join the single currency, our Revenue departments would come under pressure from UK businesses to allow taxes to be assessed, reported and paid in euro. That would be no more than was offered by countries which participated in the first wave. We have allowed taxes to be paid in euro from 1 January this year. So far, the investment that we have made in IT and other systems to enable that to take place has been small--about £150,000. We considered that to be commensurate with a relatively low take-up. Even without extending the euro options for UK businesses, increased take-up of existing options would require significant investment to ensure cost-effective and accurate services. I am sure that hon. Members would want that.
Thirdly, by making relatively small and well-targeted expenditure now, we can save substantial sums if the UK were to join. That is effective public sector planning, to deliver best value for money, of the kind that any sensible organisation or business would undertake.
The right hon. Member for Horsham and several other hon. Members asked me for detailed figures as to expenditure. I shall set out exactly what was spent up until the end of February 1999. The public sector spent £27 million on ensuring that the City of London and many businesses and departments were able to deal with the euro from its introduction on 1 January. The Bank of England, the euro preparations unit in the Treasury, Revenue departments and the Department of Social Security accounted for most of that preparatory spending. Less than £2 million has been spent on preparing for the possibility of UK entry. The Bank of England spent about £16.6 million preparing for 1999--£17 million in total. The euro preparations unit spent £8.5 million, of which only about £50,000 was related to possible UK entry.
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