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Mr. Letwin: Properly, as my hon. Friend helpfully says from a sedentary position. That is the whole purpose of
the rest of the Bill. Clauses 16 and 17 are in the Bill, I admit, by sleight of hand, but they are there. They should display, if any provision should, the principles of proper accounting that are meant to be enunciated in the rest of the Bill. It will be a sad day for accounting if this is meant to be a sparkling example of clarity about how something should be accounted for.
Despite repeated entreaties about these matters in Committee, as far as I can see, new clause 7 contains not a single mention of the accounting treatment of that mysterious body, whose nature we have already owned we cannot discern. As my hon. Friend the Member for Sevenoaks has pointed out repeatedly, if we look at new clause 7 and clause 16, to which it refers, it may be that the body will incur considerable liabilities in respect of guarantees, loans and non-equity investments. How will those be accounted for?
The body may have investment assets. We may be told by Ministers that that is not the intention, but I repeat: that is what is provided for in the Bill and, by implication, in new clause 7. The very first paragraph of the register of assets, which underlies the whole of the Bill, states:
The National Asset Register covers all central Government departments together with their executive agencies (including trading funds).
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Is Partnerships UK a trading fund? We are back to the ontological question. I do not know whether it is a trading fund, but I suspect that it is not. I may be wrong about that, and am open to correction. Is it an Executive agency? I do not think that it is. I may be wrong, and am more than happy to be corrected on that point, too. However, I am convinced that it is not a central Government Department, so its assets will not be in the National Asset Register.
Therefore, the first point about the body's accounting is that the asset side of its balance sheet will not be there--it is Macavity; it is gone; it has disappeared. It has, in fact, not even appeared. It is pretty bad news, is it not, to discover not only that a body being established by the Government Resources and Accounts Bill will be exempt from the access of the Comptroller and Auditor General, but that the body's whole purpose will be entirely mysterious and its assets will not be accounted for? That is genuinely self-parodic.
The situation is much worse on the liabilities side. In what, I have to admit, is one of the most remarkable and brilliant pieces of apparent clarification ever offered by a Minister to a Standing Committee member, the Economic Secretary has cast a profound veil of obscurity over the issue of liabilities. In Committee, my hon. Friend the Member for Arundel and South Downs raised the pertinent issue that I am raising now in relation to new clause 27. He asked how the liabilities, and particularly the guarantees, that the body might give, and that might be given to the body by the Government, would be accounted for.
On 10 February, the Economic Secretary replied at some length to my hon. Friend in a letter. Although I would be surprised if it were the intention that anyone
should be able to understand what she said to him in that letter, I am certainly assured that no Opposition Member in the Chamber has the slightest understanding of it. She said:
The letter continues:
I may be wrong about that. Perhaps, all of a sudden, the Financial Secretary and the Economic Secretary will leap up and tell me the exact figure for the contingent liabilities recorded in the supplementary statements to the consolidated fund and national loans fund accounts. I doubt it, however, not only because those are among the most profoundly mysterious documents that have ever been produced by Whitehall, but because they are intended to be so.
Mr. Edward Davey:
Is not the hon. Gentleman simply criticising the whole Supply procedure? Such documents exist, and they are very important documents that Ministers and the House should examine. The fact that the House does not properly examine the Government's estimates is the real reason why those documents do not receive the attention that they should receive.
Mr. Letwin:
The hon. Gentleman is right. At a more serious level, I am saying the same. He says the same in other amendments that we shall discuss later, and with which we profoundly agree. There is a massive issue here that goes way beyond the scope of new clause 7, and we shall discuss it later in our proceedings. Perhaps the most
I am making the much narrower point that the Economic Secretary's letter was a masterpiece of opacity, the purpose of which was to tell us about an outdated system, which itself was obscure, for making a contingent liability disappear. The letter said nothing about how contingent liabilities will be accounted for in the system that the Bill--this is the supreme irony--establishes. One might have thought that that would be relevant to the question of how far, in the Bill, the liabilities from the new body to the Government and from other entities to the new body will be accounted for. That, of course, takes us straight to the "Resource Accounting Manual".
The extraordinary thing is that when we go to the manual, we discover nothing more, or at any rate nothing more that is in any way clear. The point is very pertinent to the concerns that my hon. Friend the Member for Sevenoaks expressed about the nature of the beast.
In paragraph 4.7.6 of the "Resource Accounting Manual", we are told:
Mr. Davey:
In Committee, did not the right hon. Member for Haltemprice and Howden describe protective markings as sophisticated and not for National Audit Office eyes?
Mr. Letwin:
The hon. Gentleman may have a valid point. However, let me pass on from all of that.
Let us assume for a moment that the protective marking is not an issue, and simply ask ourselves whether the contingent liabilities that we are discussing will have to be disclosed. The answer is that we do not know, because we do not know whether my hon. Friend the Member for Sevenoaks was right about the nature of the beast.
Firstly, you asked about the procedure for reporting guarantees and whether any guarantees given to PUK will appear in Government accounts or in a note to them. I can assure you that Parliamentary reporting arrangements in respect of contingent liabilities--which includes those arising from guarantees--will not change under the GRA Bill.
Therefore, the first thing that we are told is not the answer, but that nothing will change. As we did not know what the situation was in the first place, that is not helpful. Nevertheless, the Economic Secretary went on to say:
As I said in Committee, there is no intention to hide guarantees. The arrangements for reporting guarantees are set out in section 26.3.13 of--
at this moment in reading the letter, one hopes to hear the "Resource Accounting Manual", which is the document that has been produced in line with the Bill, but no. The letter says that the arrangements
are set out in section 26.3.13 of Government Accounting,
which I take it is to be superseded, or at least outdated, by the very item that underlies the Bill that we are discussing.
"In respect of PUK this would mean--
or that item that was no longer relevant would mean--
that a statement would be laid before both Houses of Parliament in the event that a guarantee were given. Such a statement would indicate that the liability would be charged to the Consolidated Fund. Any guarantee provided would appear, like other contingent liabilities, in the Supplementary Statements to the Consolidated Fund and National Loans Fund Accounts.
We have before us two of the most distinguished members of the Government, but I venture to prophesy that they have never seen, let alone read or studied, the supplementary statements to the consolidated fund and national loans fund accounts. I suspect that there is not an hon. Member who has the slightest idea which guarantees are or are not contingent liabilities recorded in those supplementary statements.
separate disclosure of information about a particular contingency need not be made if that information has a protective marking.
There are, therefore, certain types of information that have a "protective marking", about which not even a statement on contingent liability needs to be made. As I cannot understand paragraph 12.1.23, I do not know what it is to have had a protective marking or what qualifies as having a protective marking. I understand from paragraph 12.1.23 that the description of protective markings is given in the "Manual of Protective Security: Framework and Guide", issued by the Cabinet Office. I spent a while with that document, which, for all I know, my right hon. Friend the Member for Haltemprice and Howden is the author of or a guru on. However, I have to admit that my paltry intellect was quite incapable of deciphering the rules for protective marking.
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