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9.30 pm
Mr. Letwin: Perhaps I can help my hon. Friend. That phrase refers to the functions that are assigned under amendments Nos. 1 to 5, which systematically replace the word "Treasury" with the phrase "the Independent Body".
Mr. Cash: I am grateful to my hon. Friend. That is one of the points on which you, Mr. Deputy Speaker, prevailed on me not to pursue too far.
My point is slightly different. Irrespective of whether those functions are referred to in amendments Nos. 1 to 5, the difficulty is that the independent body would have a degree of statutory authority that would exceed that of any other body or person that I can think of, except perhaps the Comptroller and Auditor General, whose functions are circumscribed by an Act of Parliament. Therefore, it is necessary to consider the position of the independent body in relation to its accountability to Parliament. It would be a little odd to find that the independent body was not subject to any surveillance by those who are elected even though it would have a role in tax, public expenditure, resource accounting and analysis and other complex matters, as well as in the labyrinth of European financing, accounting, pension liabilities, convergence criteria and all that goes with that. The New Zealand model was mentioned and that might be a subject for consideration as the Bill progresses.
Mr. Letwin:
Is my hon. Friend thinking of the possibility that a Select Committee, a new Joint Committee, a Special Standing Committee, the Public Accounts Committee or some such body should scrutinise the activities of whatever independent body is designated under the Bill?
Mr. Cash:
It might be such a Committee. However, it might be possible for a new schedule to be added to the Bill. That could more closely define the nature of the independent body, so that we have a clearer picture of its functions in relation to the fabric of parliamentary procedure. It is difficult for me to try to come up with ideas off the cuff, so I will not do so now. However, my hon. Friend's point is worth considering.
The relationship between the independent body and the Comptroller and Auditor General is another issue. The proposals for the body take me back to the time when some of my hon. Friends lost the Whip, not over Maastricht, as is sometimes suggested, but over a
subsequent Finance Bill. The issue was what resources should be made available to the Government of the day from the European Union and what the balance between income and expenditure should be.
At that time, I was very much engaged in trying to identify fraud. In a nutshell, my amendment to that Finance Bill tried to demonstrate the necessity for other member states to have similar bodies to our own. By extension, the independent body in the new clause would require a series of analogous of bodies in other members states to complement it. It would be ludicrous--as I argued in Committee--to have public accounts committees in other member states performing the same function for the sake of maintaining the democracy that is at the heart of new clause 1. At the same time, if there were to be such a thing as an independent body subject to the reservations I have expressed, it would be necessary to have a similar body in other member states. Given the acquis communautaire and all that goes with economic and monetary union, we may say that we will have one set of standards and analysis and the consequences of forming the adjustment as between resources and accounting in this country will be X. However, that will not be complemented by similar requirements in other member states.
Mrs. Gwyneth Dunwoody (Crewe and Nantwich):
Is the hon. Gentleman seriously suggesting that if other European Union countries do not want to maintain high accounting standards, we should not do so ourselves? That is an interesting reversal of his normal position.
Mr. Cash:
I am making exactly the other point. Consistent with all that I have ever said on the subject, if we do not know that other member states will insist on the same standards that we expect, we will end up being cheated and gipped by them. A degree of equivalence is essential. I am not advocating that because I do not want the extension of powers to other member states. But if we are to have an independent body as proposed by new clause 1, I would want to know that the same degree of probity, transparency and accountability will apply in other member states. For sure they cheat us now. With proposals of this kind, we can manage to prevent that happening.
Mr. Stevenson:
Is the hon. Gentleman saying that unless similar bodies are established in other member states or the EU accepts the proposed independent body, it would lack any credibility?
Mr. Cash:
I am saying that the independent body would be able to provide--with the adjustments and reservations that I have described--a degree of objective transparency, provided that it was ultimately subjected to surveillance by elected politicians and Parliament. That is the burden of my argument. I agree with the idea that there should be a degree of independence as reflected by the principles that underlie new clause 1. If that is good enough for this country and if over my dead body--and that is probably true--we were to go into the single currency, we became absorbed by a megastate and our accounts were totally intermingled with those of the EU, it is essential that the same degree of transparency and accountability be applied to other member states, to ensure they do not cheat on us. That has been going on.
I tabled an amendment to a Finance Bill to be sure that we would achieve a degree of correlation between our PAC and the committees of other member states. Sitting more or less where the hon. Member for Stoke-on-Trent, South is seated now, I had an arrangement on that very question, through the Government Whips, with the then Prime Minister.
Mr. Deputy Speaker:
Order. The hon. Gentleman is going wide of the amendment.
Mr. Cash:
The anecdote is quite interesting but I take your point, Mr. Deputy Speaker.
Mr. Deputy Speaker:
Order. It may be interesting but it is beyond the scope of the amendment.
Mr. Cash:
I accept that. If I do not have the opportunity to recount it in the House, I shall have to include it in my memoirs. It has often been said that the best way to keep a secret is to make a speech in the House of Commons.
I much agree with the remarks of my hon. Friend the Member for West Dorset (Mr. Letwin), who made a superb speech, and of the hon. Member for Kingston and Surbiton, who addressed the question with a balance between technicalities and constitutional objectivity, which is essential.
On the face of it and by any reasonable standards the Bill is as boring as a Bill can be, until one considers the principles that underpin it. They are the key issue and I pay tribute to my hon. Friend the Member for West Dorset for drawing attention to the democratic principles that lie at the root of the new clause to emphasise the necessity of achieving objectivity, transparency and accountability. The Government ought to give serious consideration not only to the arguments that have been made, but to what will happen when the House of Lords gets its hands on the proposals.
Notice has been given that the Parliament Acts will be invoked, but if they are and if the Liberal Democrats, the Cross Benchers and Opposition Members in the House of Lords combine--as they have, to considerable effect--the Government will experience increasing difficulties. Whether they accept the new clause or not, in the context of these myriad arguments they will find themselves required to consider the necessity for greater objectivity in relation to these provisions.
Mr. Tyrie:
I am delighted to have listened to the speech of my hon. Friend the Member for Stone (Mr. Cash), which was an impressive tour de force that raised a number of interesting issues that I had not thought about at all. I have three main points to make: the first concerns the relationship between obtaining better numbers and ensuring that there is public confidence in them, which is central to the new clause; secondly, I shall develop the argument that only an independent body can deliver that public confidence; and, thirdly, I shall argue that some of the benefits of an independent body would go way beyond the narrow intentions of the new clause to the benefit of macro-economic policy as a whole.
However, I want to touch on some of what has been said by others, although not at length, as it is worth considering further, if only as questions. For example,
might it be possible that the courts, through judicial review, could achieve some of what we hope an independent body would achieve by another route? That interesting idea had not crossed my mind, but should have done. My guess is that it would be extremely difficult for them to achieve that because they would be unlikely to be able to obtain the detailed information that would be required. Much of it will simply never surface in the public domain and always stay in the Treasury. A challenge would be difficult to mount, but I am not a legal expert and it would be helpful to hear a view on that.
Mr. Letwin:
I agree that an interesting question has arisen. In the absence of the new clause, if a citizen felt aggrieved because of a particular accounting decision and if that citizen persuaded the High Court that the decision on the accounting principle had been taken unreasonably might there not indeed be grounds for judicial review?
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