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Mr. Deputy Speaker: Order. I have difficulty with the hon. Gentleman's reading various clauses. We are considering new clause 1, and the hon. Gentleman should refer to that.

Mr. Tyrie: The purpose of new clause 1 is to ensure that the Treasury cannot merely decide that the

accounts shall contain such information in such form as the Treasury thinks fit, and be designed to conform to generally accepted accounting practice subject to such adaptations as are necessary in the context,

but that it should be subject to what an independent body says. That is nub of the argument. Far from straying from the point, Mr. Deputy Speaker, I believe that I was right on the button when I read out clause 9(2).

Mr. Gerald Bermingham (St. Helens, South): On a point of order, Mr. Deputy Speaker. If the Chair makes a ruling that a point is out of order, is it right for an hon. Member to challenge the Chair without having the decency to allow the Chair to answer?

Mr. Deputy Speaker: I am very capable of dealing with these matters.

Mr. Tyrie: I have never doubted that, Mr. Deputy Speaker. For the sake of the record, I should like to say that I was not for one moment seeking to challenge your authority or your ruling, as I think you will understand.

It being Ten o'clock, the debate stood adjourned.

Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),

That, at this day's sitting, the Government Resources and Accounts Bill may be proceeded with, though opposed, until any hour.--[Mr. McNulty.]

Question agreed to.

As amended in the Standing Committee, again considered.

Question again proposed, That the clause be read a Second time.

Mr. Tyrie: I would describe clause 9(2) as the ultimate "Trust us" clause: "Do whatever the Treasury thinks fit, and we can just jog along."

In fact, the situation is much worse than that, because in other parts of the Bill, the NAO's powers of access are being restricted: access to service providers to find out information, access to information on quangos, access to enable it to audit departmental performance measures and much else that we shall come on to later and that I shall not discuss at any length now. The fact that the NAO does not have unfettered powers of access is a further cause for concern and a further reason why the new clause may ameliorate the situation.

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Clause 9 says, "Trust the Treasury". Why should we? I used to work in the Treasury, and I can assure every hon. Member that it is a great place, full of stout chaps and chapesses, full of very able people. But, although the Treasury is Whitehall's policeman, it is ultimately an institution which itself needs to be policed.

It was partly with that in mind that after I worked in the Treasury I started to write a long pamphlet, or a short book, on the control of public spending, in which I proposed a new clause 1. Of course, it was not called "new clause 1". The paper was finally published in 1996. I wrote:

A further safeguard . . . would be to create a small independent fiscal policy committee with a few full-time staff. Answerable to the Public Accounts Committee,--

that answers the point raised a moment ago--

. . . its primary role would be to police the definitions--

that is, the standards--

in the public accounts (including 'capital accounts'),

which is a crucial issue in the whole debate.

So the idea of new clause 1 is not new. I did not invent it; I picked it up off ideas that were floating around in New Zealand at the time. I did not use the internet to find that out; I dropped them a line. The idea of having an independent body to police parts of fiscal policy and the accounts is of very long standing and is one that should commend itself to the House.

I hesitate to read out the new clause, because I do not want to be ruled out of order. Subsection (2)(c) is targeted specifically at the deficiencies of an institution that already exists, the Financial Reporting Advisory Board. The main weaknesses of that body are that the Treasury appoints its members and that it reports not to Parliament, but to the Treasury.

Mr. Letwin: The body could be the FRAB in a new form--I am sure my hon. Friend is about to come on to that--or to a specially constituted national accounts commission, which is where we started.

Mr. Tyrie: As I understand it, the FRAB has a very worthy role. It advises the Treasury on how to reconcile public and private accounting practices, but in my view it cannot do much to bolster the credibility of the numbers in resource accounting, because it is not independent of the Treasury. Clearly, it cannot be independent if it is appointed by the Treasury and answerable to it.

I do not want to suggest that all these problems have suddenly developed out of thin air. The Bill has not suddenly created a huge new crisis in the accounts. The existing system is not perfect, which is why the Bill is being brought forward. It is worth bearing in mind the system that we have in place--the Gladstonian system of scrutiny, which would be partly replaced by the new clause.

Mrs. Dunwoody: I hope that it will not come as too much of a shock to the hon. Gentleman to learn that hon. Members are often not astonished when the Treasury manages to fiddle the figures. We are only astonished that it ever does anything else.

Mr. Tyrie: Having worked in the Treasury, I can assure the hon. Lady that, although fiddles may occasionally have happened, they were the exception

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rather than the rule. I shall say more shortly about how these ghastly practices get going in the Treasury, and about whether they are more prevalent now than they were in the old days; but I shall take her intervention as well meant, which I am sure it was.

Let me say something about the existing system. Earlier, I asked whether, if we could not have new clause 1, it was worth having resource accounting at all. The alternative to resource accounting is the existing system, which is at least fairly clear and understood by most Members. Incidentally, I thought that that was what the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) was going to say. Under the existing system, Parliament votes annual cash amounts, Departments explain how they are spent in appropriation accounts, the NAO checks that those Departments have done what they said they would do with the money, and the PAC reports to Parliament on the reports produced by the NAO.

As I said, the system of cash accounting is fairly clear and well understood, although it has led to many problems historically, largely as a consequence of inflation. Gladstone devised the system in a deflationary era, but it did not stop a lot of ripping wheezes getting into the accounts. I use the phrase "ripping wheezes" because it was used in a book by Joel Barnett, now Lord Barnett, called "Inside the Treasury", in which he described how he used to engage in such activities. He would sit down with a group of officials, and work jolly hard at getting as many ripping wheezes as possible into the accounts to fiddle the public sector borrowing requirement.

It is not just coincidence that no such passages will be found in the memoirs of Nigel Lawson or Geoffrey Howe. As far as I know, no such committees were convened to fiddle the accounts at that time. I believe that, on the whole, the problem of ripping wheezes has been more prevalent under Labour than under Conservative Governments. There is a good reason for that. On the whole, during most of the post-war era, Conservative Governments have been keener to see a lower PSBR than Labour Governments. That does not mean that the PSBR has not sometimes become unacceptably high under Conservative Governments, but it reflects a difference of intent, and a different level of concern about the PSBR, which has led, partly, to the package of confidence- building measures that the incoming Labour Chancellor felt obliged to introduce as soon as he took office in 1997.

Mr. Bermingham: I sit here quietly amazed--indeed, I have sat here for years, although mostly on the Opposition Benches, quietly amazed--at the misleading information that has been given. Am I to understand that the hon. Gentleman, a former employee of the Treasury, is blatantly admitting that over the years the Treasury has fiddled the figures time and again? If so, I--who declare an interest as a prosecuting counsel--shall be only too happy to call him as a witness against his own Government.

Mr. Tyrie: Hansard will reveal whether I am right, but I thought that I was saying that ripping wheezes--itself a phrase used by a former Labour Chief Secretary to the Treasury--were very prevalent under Labour Governments, and far less prevalent under Conservative Governments. As far as I can recall, when I was an adviser to a Conservative Chancellor I never sat at a table with others trying to work out ripping wheezes, but when

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I consult the memoirs of former Labour Treasury Ministers, I find that they are happy to describe their participation in just such events. Indeed, they are proud to have been inventive enough to find ways in which the PSBR could be massaged down to stave off yet another crisis in the markets.

Ripping wheezes are still prevalent in the existing system. One that has carried on under both Conservative and Labour Governments is export credit guarantees. I have had a serious go at looking at the accounts of the Export Credits Guarantee Department. They are completely impenetrable; they are utterly incomprehensible. Why? Because they often conceal several billion pounds a year of public money, which is being poured down the drain for purposes that I have not yet fully been able to fathom.

The PFI is another ripping wheeze. It can easily turn into a means of passing to future generations the cost of benefits that we are enjoying now. It is a dangerous precedent.

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