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Mr. Rendel: Will the Minister confirm that the Comptroller and Auditor General is there to audit on behalf of Parliament and not on behalf of the Government? Is the study a study into what audit should be done on behalf of Government or on behalf of Parliament?
Mr. Timms: The position is absolutely clear: the audit is on behalf of Parliament. Our amendments make that very clear, and I am grateful to the hon. Gentleman for giving me the opportunity to put that on the record.
Mr. David Davis: I welcome the study. Although the Minister will understand that we would prefer the approach of putting the provision into statute now, and that I am a little disappointed that the amendment does not apply also to the other two spheres--performance validation and access--I welcome the study and am minded to take part in it. I shall have to talk to the Chief Secretary about several matters, such as remit, membership and the types of issues that have just
been raised, but I shall do all that as quickly as possible. I hope that we shall be able to resolve a way forward on the matter.
Mr. Timms: I am grateful to the right hon. Gentleman, and am glad that I took his intervention. It has taken us significantly forward.
The amendment meets a concern expressed in Committee that, unless action were taken in the Bill, it might not be possible for many years to introduce any changes to the audit of NDPBs, even if the dialogue proposed by the Chief Secretary recommended that that change would be sensible. The key action that we are taking in the amendment is to remove the statutory obstacle to what the PAC Chairman and other Committee members, including my right hon. Friend the Member for Swansea, West (Mr. Williams), are seeking to achieve. I was grateful to my right hon. Friend for acknowledging that point in his speech.
New subsection (3) in the amendment makes it clear that examinations conducted by the CAG under clauses 5, 7 and 11 are conducted on behalf of the House of Commons. I reiterated that point in replying to the hon. Member for Newbury (Mr. Rendel) a moment ago. In Committee, we debated a similar amendment tabled by the right hon. Member for Haltemprice and Howden, and we undertook further to consider the point. The amendment is the result of those considerations, after further discussions between the Treasury and National Audit Office officials.
We think that it is sensible to include the amendment now, as the CAG does not conduct some of his audits, mainly of international bodies, on behalf of the House. We therefore have to make it clear that all his audits under the Bill are indeed on behalf of the House.
On the new clause tabled by members of the PAC, I said earlier that any approach must provide for circumstances that would make it sensible to appoint an auditor other than the Comptroller and Auditor General. In our view, a blanket, one-size-fits-all approach is not the right way to proceed.
The right hon. Member for Haltemprice and Howden proposed a blanket approach with his new clause 2 in Committee, but, after lengthy exchanges, he withdrew it and promised to bring forward an amended version on Report. The new clause that we now have would provide for the CAG to be the auditor at the expiry of the term of the existing auditor of all NDPBs except those designated by the relevant Minister. Ministerial designations would be subject to the approval of the House by affirmative resolution.
Our view is that the revised new clause would go too far in the direction of making the CAG automatically the auditor of all NDPBs. Before reaching a conclusion we
need to have regard to a range of issues, not least the particular concerns of the Departments responsible to Parliament for overseeing the bodies in question. Some Departments take the view that the competitive tension secured by the periodic tendering of audit appointments brings a better service. Some believe that the NAO may not have the specialist expertise necessary to handle a particular audit. All those issues need to be considered carefully before decisions are made about a number of the NDPBs that we have been talking about.
Let us not forget, too, that, under the Government amendment, Treasury designations will reflect the concerns not only of Departments, but of the CAG, as the Treasury is expressly required to consult him before proposing a designation to Parliament.
All the issues need to be addressed as a whole.
Mr. Timms:
I ought to conclude now, but I shall take a final intervention from the right hon. Gentleman.
Mr. Davis:
I thank the hon. Gentleman for his patience. The reason for putting in a timetable was to enable those consultations to take place. If it was decided at the end of the period that the situation was inappropriate, for whatever reason, it would be possible for the Minister to come back to the House and, by affirmative resolution, exempt the body in question from the CAG's audit. That was the purpose of the structure of the new clause.
Mr. Timms:
Our amendment deals with that. I accept that the right hon. Gentleman has done some work since he drew up his original proposals, as have we.
The study that my right hon. Friend the Chief Secretary has proposed is very important. I am pleased that the right hon. Gentleman is minded to take part in it. Once that study has been completed, we can consider what further changes might be appropriate.
I urge the House to accept the Government amendments and to reject the new clause.
Mr. Davis:
I shall press the new clause to a Division.
Question put, That the clause be read a Second time:--
The House divided: Ayes 27, Noes 253.
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