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Mr. Letwin: I am grateful to the hon. Lady, but perhaps she should take another look at column 256. My hon. Friend the Member for Arundel and South Downs said:
- £500 million should be more than sufficient to finance whatever substantial portfolio of start-up feasibility studies may be necessary . . .
- It will be useful to draw attention to the potentially unlimited expenditure in which the new body could engage.--[Official Report, Standing Committee A, 20 January 2000; c. 256.]
Miss Johnson: I accept the hon. Gentleman's point, however there has been a certain lack of charitableness in the Opposition's response to our picking up the exact drift of the intentions of the hon. Member for Arundel and South Downs and his hon. Friends in Committee.
As I have said, we have no objections in principle to imposing that limit, and within the limit we shall ensure that our commitments are the minimum necessary to enable the successful launch and development of PUK. At the same time we shall make sure that they are on terms that represent a sensible investment for the public sector.
Mr. Fallon:
I am grateful to the Minister who is being extremely kind in giving way. I know that she is trying to answer a number of points, but if she is leaving the £400 million limit, will she say for how long it is likely to apply? Will it be one year or five years? Will she explain why it is extendable only by order?
Miss Johnson:
I shall come to that in just a moment. First, let me turn to Opposition amendment No. 16.
Mr. David Davis:
I could have raised this matter on a point of order. The Minister describes amendment No. 16 as an Opposition amendment, but the amendment is in my name, that of the right hon. Member for Swansea, West (Mr. Williams) and that of the hon. Member for Newbury (Mr. Rendel). It reflects the Public Accounts Committee report on the matter.
Miss Johnson:
I am grateful to the right hon. Gentleman for that clarification. Of course I am aware of which right hon. and hon. Gentlemen have put their names to the amendment. However, it is not a Government amendment. Perhaps I should refer to it as the Public Accounts Committee amendment. It seeks to open PUK's accounts to scrutiny by the Comptroller and Auditor General. As I said in Committee, PUK will be a risk-taking private sector body. It will have a majority of private sector investors who will expect a return on their investment. PUK will, of necessity, need to act commercially to raise finance and make a success of its business. That is a job for a Companies Act auditor appointed in the normal way for private companies.
There has been some question as to the accountability for PFI and PPP projects which will, as now, remain with Whitehall Departments and other public sector bodies that commission them. The National Audit Office has already reported on a considerable number of private finance schemes. In addition, last July the Treasury issued guidance on the standardisation of private finance contracts which make it clear that PFI contracts should include an appropriate clause which will ensure appropriate NAO access. So I do not believe that there should be a problem with the NAO securing the access that it needs to PFI projects, although the matter has been raised several times during the debate.
Any Government investment in Partnerships UK under the provisions of the Bill will come out of voted money, and so will be covered by appropriation, or soon by the resource accounts, which are also audited by the NAO. It is no different from other payments to the private sector by various Government Departments, so I do not believe that the Comptroller and Auditor General does not have the access that he requires to do his job effectively.
I now turn to some other points that were made in the debate. I start with some more specific comments on the interest of the taxpayer in relation to the accounting in whole of Government accounts to which the right hon. Member for Haltemprice and Howden referred in his opening remarks.
PUK will be accounted for in accordance with the guidance on the PFI schemes which has been reviewed by both the Accounting Standards Board and the Financial Reporting Advisory Board and has been incorporated in the "Resource Accounting Manual". In terms of accounting mechanisms it is fully covered and we have set out very clearly the way in which we intend it to be treated. It is difficult to believe that there should be any problem with that.
Mr. Letwin:
Will the Minister give way?
Miss Johnson:
I should make some progress as we have spent a considerable time on this motion.
Any financial provision to PUK will be out of voted money. As I said, the NAO can audit those sums. As my right hon. Friend the Chief Secretary has made clear, as a private company in a commercial environment, it would be entirely appropriate for PUK to have commercial audit arrangements. That means that the NAO should not have unfettered access to PUK's accounts. I hope that the right hon. Gentleman accepts that.
Mr. David Davis:
Although I do not expect a response from the Minister, I want to put on record that her judgment of what is the appropriate access for the National Audit Office is clearly different from that of the Comptroller and Auditor General. Amendment No. 16 was drafted by the National Audit Office on the basis of the Comptroller and Auditor General's judgment of what he needs. His judgment is obviously different from that of the Government.
Miss Johnson:
The right hon. Gentleman said that he did not expect a response, so I shall take up that generous offer and not give one.
The hon. Member for Kingston and Surbiton commented on the objectives for managers and the objective of making the public sector more efficient. He should remember that the Office of Government Commerce is being set up to find £1 billion in savings through better procurement.
The hon. Member for West Worcestershire (Sir M. Spicer) is not in the Chamber, but he asked about the limit of expenditure. I believe that I have answered that point. That limit was never the purpose of new clause 7, so he must have been confused when he asked his question.
The hon. Member for Bury St. Edmunds (Mr. Ruffley) spoke about EU public procurement rules. Policy advice to Ministers is confidential, as the hon. Gentleman--who is a former special adviser to the Treasury--should know, but the Government, of course, will adhere to those rules.
The hon. Member for Arundel and South Downs asked about the affirmative resolution procedure in the House. I explained that any changes to the limit would be subject to that procedure. I do not understand what the problem is with that. If the Government were to consider any changes to the limits, there would have to be a debate in the House. At present, the limits are set at specific sums, rather than being inflation-proofed. I think that that also covers the point raised by the hon. Member for Buckingham (Mr. Bercow), who is also absent from the Chamber.
In conclusion, the process of procuring a PFI project under the European procurement arrangements will be just as it is now, but more tightly managed. There is no question that PUK's return, whether as a royalty or an equity, will affect the selection of the preferred bidder. Arrangements will be put in place so that that will be impossible. All bidders will make bids on the basis of the same information.
As to where the guarantees appear in the accounting, I can tell the House that Government accounting rules apply to the guarantees for PUK in exactly the same way as they do for any other body. As I said in my letter--which I am delighted has been much pored over--all the relevant detail will appear in supplementary statements. Nothing will be hidden--a possibility that has exercised Opposition Members.
I commend new clause 7, and the associated Government amendments, to the House.
Question put and agreed to.
Clause read a Second time, and added to the Bill.
Brought up, and read the First time.
Mr. Letwin:
I beg to move, That the clause be read a Second time.
Mr. Deputy Speaker:
With this, it will be convenient to discuss the following amendments: No. 1, in clause 5, page 2, line 41, leave out "the Treasury" and insert "the Independent Body".
No. 2, in page 3, line 1, leave out "the Treasury" and insert "the Independent Body".
No. 3, in clause 9, page 5, line 7, leave out "the Treasury" and insert "the Independent Body".
No. 4, in clause 10, page 5, line 15, leave out "the Treasury" and insert "the Independent Body".
No. 5, in page 5, line 17, leave out "the Treasury" and insert "the Independent Body".
7.30 pm
'.--(1) The Treasury shall by order designate an Independent Body, which shall have the functions assigned to it in this Act.
(2) The Independent Body shall be either--
(a) an existing body serving the accounting profession in the UK; or
(b) an existing international body serving the accountancy profession; or
(c) a new body, established for the purpose, whose members are appointed solely upon the basis of their expertise in
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