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12.15 am
My point is that one could choose, under one's accounting principles, to account for that extra £2 billion a year entirely as expenditure, partly as expenditure and partly as an addition to assets, or entirely as an addition to assets. In other words, a cumulative figure of £2 billion a year of putative Government expenditure, and certainly of cash outlay, may at the Government's whim be accounted for as expenditure or as part of capital. The scale of that means that even by the end of the Parliament, when the new scheme is barely up and running, the amount of the new student loan book will be nearly £7 billion.
Mr. Deputy Speaker (Mr. Michael J. Martin):
Order. The hon. Gentleman is speaking in great detail about the student loan scheme. He may mention that the scheme could be better scrutinised if the new clause were adopted or rejected, and he has made the point that the scheme could be scrutinised by the auditors if the new clause were passed, but I cannot allow him to talk about the scheme at such length and in such detail.
Mr. St. Aubyn:
I very grateful for your advice, Mr. Deputy Speaker, and I will take it to heart.
Mr. Deputy Speaker:
Order. It was not so much advice as an instruction.
Mr. St. Aubyn:
Indeed. You will appreciate more than anyone, Mr. Deputy Speaker, that in a Government Budget of over £300 billion a year, £6 billion is 2 per cent. of expenditure and a significant figure. Hon. Members are making the point that sums of that magnitude should be subject to external scrutiny. The Government should not be able to magic such sums out of thin air, perhaps in the run-up to a general election, and say that it is extra money that they have discovered through their ingenuity--or rather their creative accounting--and which they may spend in areas that are helpful to them in that election.
We seek to resist that insidious process, but there is another issue. It is a fact of life that when people can hide their problems, they tend to ignore them. The great virtue of the admittedly old-fashioned system of cash accounting is that no one could hide the fact of where cash was coming from or going to. Under resource accounting, without independent judgment on the fairness of the accounting methods being used, it will be possible to hide problems.
Without wishing to test your patience too far, Mr. Deputy Speaker, I will simply say that the example of the student loan book is a good one because the Government have developed a thoroughly bad system for that, and they should reform it. If they could not hide those problems under the guise of resource accounting, they would be forced to address the anomalies, the inefficiencies and the cost to students, which will result from their carrying on such a poor, Mickey Mouse system for funding students, which is unlike that adopted by any other country in the advanced world.
As a long-standing member of the Education and Employment Committee, I am now familiar with that system, and if what I have said is true of that, how true must it be of other areas of Government expenditure, about which I am the first to admit that I have very little knowledge? I know, however, from my business experience and my time as a banker and a student of the principles of accounting, that false accounting can go on for several years before it is discovered. False accounting can certainly tide a Government over a critical election period, and it could change the way in which we are governed.
That is why I believe that my hon. Friends are absolutely right, even at this late hour, to raise this arcane issue. It may not attract a leader column in The Sun tomorrow, but sadly, in irresponsible hands--I am afraid that sometimes the Government have proved themselves to be irresponsible--it could have as much influence on an election result as a leader in the national press, if not a great deal more influence.
As I said, I am struck by the fact that the purview of the new clause is limited. I hope that before the end of the debate, someone will explain to me and other hon. Members why it is so limited.
The case of Remploy was mentioned earlier. I am familiar with that company, having been a customer many years ago. It supplied me with excellent products for incorporation in a product that I was selling on the market. Given the subsidies and the special circumstances of Remploy, I am aware that it needs careful accounting and scrutiny to ensure that its accounts are fully in order.
I have no quarrel with the framework proposed by my hon. Friends and have heard nothing from the Government to suggest that it is defective. I therefore add my voice to those who ask why the Government are being so unreasonable. This is not the first time, even this week, that we have witnessed pigheadedness, if they will forgive me for the phrase, in the response from those on the Government Benches to suggestions from the Opposition.
We are not always trying to be partisan. Earlier in the week, I put forward a proposal backed by the teaching unions--not a group that usually supports the Conservative party--but the Government would not give the proposal a minute of the House's time, which we are using up tonight on the new clause. If they wished,
Ministers could intervene to explain that while their purpose is honourable, they cannot accept amendments that were tabled in good faith and that are fully supported by those outside the House who understand the issue.
Mr. Rendel:
In speaking to the amendment, I am tempted to go back through a number of the arguments made in Committee, but you will be pleased, Mr. Deputy Speaker, to hear that I shall try my best to resist the temptation, partly because the right hon. Member for Haltemprice and Howden (Mr. Davis), the Chairman of the Public Accounts Committee, has already repeated some of my arguments on that occasion, very flatteringly quoting from my remarks.
It seemed to me on that occasion that the argument was won for greater powers for the National Audit Office and the Comptroller and Auditor General, except in one particular. One argument produced by the Government struck me as being a strong one to which attention had to be paid.
For a number of bodies, an auditor had already been appointed and a contract had been set up for a significant period--five years, perhaps. To break that contract might involve considerable expense for Government or a duplication of resources, which was a silly way to proceed. I took that argument on board and I did not immediately see what the reply to it was.
However, the new clause tabled by three of us who are members of the PAC answers that point. The new clause gives the Government the right to choose not to go ahead straight away with appointing the Comptroller and Auditor General as the auditor for all those bodies, but to move to that system when the current contracts come to their natural end. That demolishes the last argument that the Government had for carrying on, at least temporarily, with the current way in which the bodies are audited.
It seems to me that the Government have given no good reason yet--and the issues were debated for a long time in Committee--for not accepting the new clause. The Government's amendments are not nearly strong enough to answer the points that were made in Committee and on Second Reading.
As has frequently been said, the National Audit Office was established as Parliament's watchdog. One of the delights of taking part in the proceedings from the Liberal Democrat Benches is that so many complimentary comments have been made about one of our predecessors, William Ewart Gladstone, and his work on behalf of Parliament almost a century and a half ago. We are proud of his work and pleased that it has been so widely acknowledged.
Gladstone established the important principle that the National Audit Office and the Comptroller and Auditor General should be responsible to Parliament, and that Parliament should have an external aid to keep a check on the Executive. People often say how great it is that we live in a democracy. I reply that it is not a strong form of democracy because we are ruled constantly by a minority. However, one of the strengths of our democracy is that Parliament has the opportunity to have some control over the Executive. That opportunity is not shared by many societies in our world. It is good news for us that we live in such a society.
The strength of the system is that Parliament has an external aid to enable it to keep good control over the Executive. That principle held for more than 100 years before it was gradually diminished. Sadly, it lost some ground as Parliament established bodies that were not under the control or audit authority of the Comptroller and Auditor General. That is a pity.
The Bill gives us an opportunity to repair the damage and to return to the audit authority of the Comptroller and Auditor General all those bodies whose affairs he had lost the right to audit and report on to Parliament. The current opportunity may have come to us by chance because the Government did not originally intend the Bill to amend the fault that had arisen. Nevertheless, that opportunity should have been grasped, and I hope that it will be grasped tonight.
The important principle that we are considering was reasserted in the Public Accounts Committee's latest report. Some of its words are worth repeating. It states:
the Committee believes that Parliamentary accountability will be enhanced if the Comptroller and Auditor General is able to audit on behalf of Parliament all public bodies carrying out central Government functions, and has statutory access to bodies and contractors delivering services on behalf of Government departments . . . We believe in the principle that the Comptroller and Auditor General should have full access to all Government expenditure.
I hope that I do not reveal any state secrets when I say that those phrases were discussed at some length when we discussed that report in the Public Accounts Committee. It is clear that the Committee wished to reiterate clearly in its unanimous report that it believes in the principle that we are discussing. It is important and strengthens Parliament enormously against the Executive.
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