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Mr. Davis: Of course my hon. Friend is right. However, I wish to focus on the single issue of the effect on the amount of information within the Government. The hon. Member for Kingston and Surbiton spoke eloquently about the prospective revolution in public service delivery that we face in the next couple of decades arising directly from resource accounting and its associated measure of performance--output-related government and outcome- oriented government. They offer a massive transformation. I think that was rather too reticent about that. New Zealand is a good example, but it is only half way there. If the set of numbers that we are about to create in the next two or three years is not founded in such a way that it has the entire confidence of the public service and the public behind it, that threatens to undermine that transformation, which will be a massive cost to pay for what is in my view a short-sighted perspective on the proper approach to this method of resource accounting.
9.15 pm
Mr. Cash: I am intrigued by the title of the Bill. Before now, I had not taken great notice of it, but by chance some hon. Friends mentioned to me that I might find it interesting, and I do.
For some time I have been an adviser to the Institute of Company Accountants, and the Bill makes some reference to accounting standards. However, I am concerned about the way in which the Treasury would acquire vastly increased power under proposals whose principal I otherwise endorse.
For example, the resource accounting system would deal with income--which, in this context, means tax. It would also deal with expenditure, which here means expenditure on public services. The question of assets and liabilities depends on the balance between what is acquired by the private sector, and what remains in the public domain. That raises complex questions.
Clause 5(1) states:
However, the words "in accordance with directions" raise several questions. First, will the directions be general or specific? We do not know. In my past legal career, I spent some time advising many bodies, including public bodies, about the nature of directions, and about remedies in judicial law with respect to them. Is it intended that the directions will be subjected to judicial review? If so, the questions that arise are closely related to the objectives of new clause 1.
Mr. Letwin:
Is my hon. Friend aware that the Bill talks about both general and specific directions? The general directions are contained in manuals; no doubt, the specific directions will be the interpretation of the manuals. If it comes to judicial review, how will the courts respond?
Mr. Deputy Speaker:
Order. The hon. Gentleman has mentioned clauses other than new clause 1. He has also referred to the Bill in its entirety. We are dealing with a specific amendment, which is the new clause before us.
Mr. Cash:
I am grateful to you, Mr. Deputy Speaker, because I am mindful of the fact that we are dealing with new clause 1. However, the group also contains
I do not know whether the provisions have been devised in accordance with rules that have been concocted, not necessarily exclusively in-house within Her Majesty's Treasury, but in respect of the European Union as well. To achieve the degree of convergence that some claim should be achieved--which I prefer to deny--between the member states to enter the single currency arrangements, there are rules which are, in common, devised at a European Union level. Will the directions to be issued by the Treasury be connected with rules that go outside purely domestic considerations, but are devised within a framework of law that is devised by directives produced by the Central Bank, which we might be shadowing, or by specific directives that apply to us? What is the relationship between the Bill and our economy, having regard to the fact that considerable amounts of our taxpayers' money comes back into the British economy and is then called European money? In relation to achieving targets such as the 3 per cent. deficit rule of gross domestic product imposed by the Maastricht arrangements, will those directions seek to achieve the degree of convergence that is necessary between our economy and those of other member states? This must be relevant, because it is about the question--
Mr. Deputy Speaker:
Order. The hon. Gentleman's point is not really relevant; it goes wide of the amendment, which is about changing from replacing "the Treasury" with "the Independent Body". That is far more constrained than the matters which the hon. Gentleman is raising.
Mr. Cash:
With respect, Mr. Deputy Speaker, the question is also related, as I have just said, to the question of whether resource accounts
Mr. Cash:
I am extremely grateful to you, Mr. Deputy Speaker, as ever, for your guidance in these matters. However, if one is to substitute the nature of the body that will issue the directions, it follows that one must be able to make a comparison between the proposed body that is being put forward--in this case described as the independent body--and the Government's proposal that the body should be the Treasury. I am simply seeking to point out that comparing those two proposals means that we have directions issued by the Treasury--
Mr. Deputy Speaker:
Order. If the hon. Gentleman confines his remarks to new clause 1--and there is plenty of meat in new clause 1--he will be able to go along with my ruling. He is concerning himself too much with what
Mr. Cash:
As ever, I am grateful for your guidance, Mr. Deputy Speaker. I have the greatest respect for your rulings in all these matters. I shall address my remarks specifically to new clause 1.
Mr. Letwin:
Will my hon. Friend help me? Is the burden of his argument that an independent accounting body, identified under new clause 1, would not have the temptation so to adjust the standards that the Government would be able to meet--for example--Maastricht criteria?
Mr. Cash:
Absolutely. Under new clause 1, it is clear that any such independent body--
Mr. Stevenson:
Will the hon. Gentleman give way?
Mr. Cash:
I shall be happy to do so, but perhaps the hon. Gentleman will allow me to finish the sentence.
Any such independent body would have regard to the fact that many fiddles go on in the EU--fraud has a significant impact on public resources and accounting. That independent body would thus be exceedingly vigilant in ensuring that those matters were thoroughly investigated. I shall come to that matter in a moment, but first I give way to the hon. Member for Stoke-on-Trent, South--I would almost like to call him my hon. Friend.
Mr. Stevenson:
I am grateful to the hon. Gentleman for giving way. I am sure that Hansard would have corrected his slip.
The hon. Gentleman referred to the possibility of judicial review against the Government and to European accounting directives. If the independent body were to deviate from accepted practices, would it not follow that it too could be open to judicial review?
Mr. Cash:
That is true. Furthermore, if I were right when I pointed out that there was some connection between the provisions of the Bill and more generalised European jurisdiction, there would, ironically, first be a judicial review in this country at the High Court and in the House of Lords and then a review at the European Court of Justice. That is the point I am trying to make.
If we have now entered a new world--a brave new world of European financial controls and economy, central banks and so on--it follows that it is essential to have the highest degree of impartiality, transparency and analysis at every stage, right up to the Court of Justice, if the provisions could be reviewed by that court.
I should be trespassing too far if I went into an enlarged argument as to the merits or demerits of the European Court. However, the hon. Gentleman's point has substance. As I pointed out earlier, when the Bill moves to another place--the hon. Member for Kingston and Surbiton (Mr. Davey) told us that they even intend to take it as far as the Parliament Acts, if necessary--some adjustment to new clause 1 may be needed, in order to clarify the extent to which the proposals for an
independent body could be changed, in line with the points made by the hon. Member for Stoke-on-Trent, South to take into account the public functions and procedures and the degree of accountability and parliamentary control that would be needed over that body. Such provisions would, indeed, be needed for the Treasury itself. A body can hardly be described as independent, if it is not subject to the higher surveillance of those who are elected.
I do not criticise the new clause; I am trying to offer some constructive help. It raises some important questions. I asked whether the words,
A government department for which an estimate is approved by the House of Commons in respect of a financial year shall prepare accounts (to be known as resource accounts) for that year detailing . . . resources acquired, held or disposed of by the department during the year, and . . . the use by the department of resources during that year.
That is the balance that has to be struck. However, clause 5(2) states:
Resource accounts shall be prepared in accordance with directions issued by the Treasury.
The hon. Member for Stoke-on-Trent, South (Mr. Stevenson) spoke about how independence could be affected by the procedures of the House and so on. However, I am realistic enough to know that the Government's huge majority will ensure that the Bill will be approved at the end of our debate, despite the manful attempts of Conservative and Liberal Democrat Members to prevail against it. Although I do not know what the House of Lords will do, I assume that clause 5(2) will remain in the Bill when it leaves this House.
shall be prepared in accordance with directions issued by the Treasury.
Mr. Deputy Speaker:
Order. The hon. Gentleman is referring to the amendments that we previously mentioned. Those amendments would delete the word "Treasury" and replace it with "the Independent Body". Therefore, we cannot take the whole clause relating to that amendment and say that that is what will be discussed. All we can do is speak to the amendments. If the hon. Gentleman wishes to have a clause stand part debate, we cannot do so.
which shall have the functions assigned to it in this Act,
referred to subsequent functions that may have been included in amendments that were tabled, but which were not selected--no doubt because of the wisdom of the Chair.
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