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Mr. Graham Brady (Altrincham and Sale, West): Is not my hon. Friend concerned that the process of appointment to a new body might be suspect, or not as rigorous as one would wish, whereas paragraphs (a) and (b) would allow the designation of an existing body of undoubted standing and repute?
Mr. Swayne: That is entirely true, but the possibilities outlined in paragraphs (a) and (b) are simply too narrow.
They do not fit the bill, so inevitably we shall have to take the risk that my hon. Friend has quite properly drawn to our attention. If the new clause was tabled because we do not trust the Treasury, one of the drawbacks of establishing a new body is that we do not trust the Treasury to make appointments to it. Nevertheless, to fulfil properly the challenge presented by the new clause, we have to choose option (c), despite the clear risk in respect of appointments to that body. However, if we take elements of (a) and (b) and merge them into a new (c), we shall end up with a body that will command the respect that subsection (1) of the new clause demands of it.
I now move briefly into my analysis of subsection (1), which goes to the heart of the Bill and provides a remedy to the problem that emerges from the Bill and our distrust of it, and to the problem that the Bill attempts to address--namely, our concern about resource accounting within the wider concept of national accounting.
Ever since the national accounts were first framed, we have argued about what they meant and what they were supposed to mean. We needed to draw up those accounts within the perspective of resource accounting because we wanted a measure of economic activity rather than just numbers. We wanted to know that economic activity represented genuine economic welfare. Initially, there was a requirement for an independent body to calculate what constituted economic activity in the first place, and that role was taken by academics at the universities. However, they could not agree what constituted the economic accounts, taking into account resource accounting.
The national accounts grew out of the desire to measure economic activity at a time when it was fashionable to believe that the Government could determine the level of economic activity. That was the essence of the science of macro-economic management, and the national accounting procedure was a means of measuring the effectiveness of Government policy. However, giving the Treasury the means of measuring the effectiveness of Government policy makes nonsense of independent scrutiny--the poacher is thereby turned gamekeeper.
Mr. Edward Davey:
I am slightly perplexed. Is not the hon. Gentleman confusing the national accounts that measure economic activity with those that measure the state of the public finances?
Mr. Swayne:
No, I do not believe that I am. The purpose of resource accounting is to take into account the wider concept of assets and liabilities. They are the essence of the national accounts, in terms of the measurement of economic activity and welfare.
However, I want to concentrate on the problems with the Bill. There was always considerable debate about what constituted the national accounts, and how they should be interpreted. Over recent years, the order of that debate has
changed. What was once an academic and proper dispute is now based on distrust. I trace that to our entanglement with the European Union.
Much of the negotiation that takes place in the EU is clouded with the proper secrecy of diplomacy. No one can reveal his hand in negotiations, because neither adversaries nor partners should know what that hand contains. A culture of secrecy and deceit--
Mr. Deputy Speaker:
Order. The hon. Gentleman is straying rather wide of the new clause.
Mr. Swayne:
I accept your stricture, Mr. Deputy Speaker. However, my point is that the tendency towards secrecy and clouding true meaning in all aspects of policy was typified by the Treasury. The result is that we now dispute any figure that the Treasury or any other Government Department produces. At Question Time every day bar Friday, for at least an hour hon. Members in this Chamber dispute what figures mean and argue about their accuracy. That is symptomatic of the problem that new clause 1 attempts to resolve.
I suggest that the new clause is absolutely desirable for that reason alone. The requirement for an independent body to scrutinise the figures would at least mean that we could agree what the figure was. We could then concentrate our arguments on the interpretation of that figure. However, people everywhere believe that Governments--of all parties--set out to deceive them.
A number of hon. Friends have mentioned examples of how that phenomenon manifests itself. I do not want to go down that road, but in a brief intervention on my hon. Friend the Member for Chichester (Mr. Tyrie), I took up his example about the private finance initiative. That is an area on which an independent review body would shed a great deal of light. My view is that the Government can raise finance rather more cheaply than any other body in the realm. Therefore, it is unlikely that they will be bettered by private initiatives, which are normally required for management rather than financial purposes.
Mr. Deputy Speaker:
Order. We are talking about an independent body, and I should be grateful if the hon. Gentleman would refer his remarks to that.
Mr. Swayne:
My suggestion was that the independent body would clarify issues of resource accounting where they are currently unclear.
Mr. Robert Syms (Poole):
Does my hon. Friend consider that any independent body should have both gender balance and ethnic representation?
Mr. Swayne:
No, I do not, because as my hon. Friend knows, I am gender blind. I have never divided humanity into two antithetical categories whose interests differ. However, I think that it is now proper to return to the discussion of what should constitute that independent body.
I have already rehearsed the arguments with respect to the opportunities afforded by new clause 1(2)(a), (b) and (c). I reiterate my preference for paragraph (c), which would shed a great deal of light on the issues that have been brought before the House this evening.
Miss Melanie Johnson:
I have listened very carefully to the points raised by Opposition Members and by my hon. Friends. Very few of the points made by Opposition Members had not been made before, and at considerable length. We heard some very reiterative speeches. Perhaps it was typical of the standard of some of the contributions to the debate that the hon. Member for Chichester (Mr. Tyrie), in discussing ripping wheezes--which was probably a ripping wheeze itself--referred to that as an expression that Joel Barnett had used in his book: although it was used and quoted by Joel Barnett, it was dreamed up by Harold Lever. I presume that that was symptomatic of the accuracy of the hon. Gentleman's general grasp of this whole area.
Mr. Tyrie:
Will the Minister give way?
Miss Johnson:
No, I am not giving way, I am afraid.
Mr. Tyrie:
Will the Minister give way?
Miss Johnson:
No, I am giving way to no one.
The Government do not accept that it is necessary to designate an independent body to specify the detailed accounting requirements for resource accounting and budgeting and whole of Government accounts. We believe that our proposals to follow the generally accepted accounting practice gap, modified only as necessary to take account of the specific requirements of resource accounts and the requirement for accounts to present a true and fair view, provide a robust and professional framework for determining departmental accounting policies. All accounting policy issues are subject to the oversight of the Financial Reporting Advisory Board which provides an independent scrutiny and which can, and does, report to Parliament.
My hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) made a good point about Conservative Members' failure to explain the difficulties of the new clause. The Treasury, unlike the proposed independent body, is accountable to Parliament. It is simply not feasible to put Parliament in charge of accounting policies. The Treasury is accountable to Parliament; obviously the independent body would not be. No one managed to address that point in the lengthy speeches in favour of the new clause and the amendments. The Government's policies--
Mr. Edward Davey:
Will the hon. Lady give way?
Miss Johnson:
No, I am sorry; I am not giving way.
The Government's proposals will mean that the Treasury has little discretion in the setting of accounting policies. That is in contrast to the present system, in which the Treasury has almost total freedom to determine the policies to be followed. The proposed system does not require the designation of either an existing body, or a new body, to determine those policies.
A framework has already been put in place--indeed, it was established by the Conservative Government--to ensure that there are limits on the Treasury's discretion. That framework is working--unlike some of the other measures introduced by the Conservatives.
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