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Mr. Denis MacShane (Rotherham): On a point of order, Mr. Deputy Speaker. Can you give us some guidance as to what will happen if, as a result of tonight's debate, we lose tomorrow's business? That has already happened once before in this Session. Perhaps we could do without Prime Minister's Question Time, but more important, at 3.30 pm tomorrow, there is to be a debate on the report of the Select Committee on Standards and Privileges on the hon. Member for Billericay
(Mrs. Gorman). She is accused of lying and of deceiving the House. [Hon. Members: "Ah!"] We can see--[Interruption.]
Mr. Deputy Speaker: Order. The hon. Gentleman must take his seat when I am on my feet. He asks a hypothetical question; it is not a matter for the Chair at this time. [Interruption.]
Mr. Deputy Speaker: Order. The hon. Gentleman will remain in his seat.
Mr. Andrew Miller (Ellesmere Port and Neston): On a point of order, Mr. Deputy Speaker. Would it be in order for anyone who has any association with any of the companies referred to in the report that is scheduled for debate tomorrow--
Mr. Deputy Speaker: Order. That is not a matter for the Chair, or for debate at this time. The hon. Gentleman should know better.
Mr. Ivan Lewis (Bury, South): On a point of order, Mr. Deputy Speaker. The integrity, probity and good conduct of Members are important, and, as a relatively new Member of the House, I seek your advice as to whether it is important for us to be kept up through the night, with the possibility of delaying--
Mr. Deputy Speaker: Order. The hon. Gentleman may be a new Member, but the first thing that he needs to learn is that when I am on my feet, he must sit down. I have already dealt with that point of order.
New Clause 3
Comptroller and Auditor General: access to information
' .(1) This section applies in connection with the examination by the Comptroller and Auditor General of the accounts of any government department or other body under or by virtue of--
(a) any enactment, including this Act, or
(b) in the case of a body other than a government department, any arrangement which provides for the accounts of that body to be subject to examination by the Comptroller and Auditor General.
(2) Subsection (3) applies only to the following records, that is to say--
(a) records which are in the custody or under the control of the department or body to which the examination relates, or to which that department or body has or can obtain access;
(b) records of a receiving body to which any paying body has or can obtain access.
(3) In connection with such an examination as is mentioned in subsection (1), the Comptroller and Auditor General shall, subject to subsections (2), (4) and (5), have a right of access at all reasonable times to any record relating to--
(b) any money originating in the Consolidated Fund,
(c) any liability or contingent liability that will or may be met out of monies originating in the Consolidated Fund, or
(d) tax credit under the Tax Credits Act 1999.
(4) The right of access conferred by subsection (3) shall not be exercisable in relation to any record relating to accounts which--
(a) are subject to audit by the Auditor General for Scotland or the Auditor General for Wales, and
(b) are not also subject to audit by the Comptroller and Auditor General.
(5) In such cases and to such extent as the Treasury may by order designate, the right of access conferred by subsection (3) shall not be exercisable in relation to any record which is not held by or under the control of the body to which the examination in question relates.
(6) An order under subsection (5) shall be made by statutory instrument, and shall not be made unless a draft of the instrument has been laid before and approved by resolution of the House of Commons.
(7) A person who holds or has control of any record to which the Comptroller and Auditor General has a right of access under subsection (3) shall give the Comptroller and Auditor General any assistance, information or explanation which he requires in relation to the matters recorded in it.
(8) In this section "paying body" means any body which pays to a receiving body money originating in the Consolidated Fund, and a "receiving body" means any body which receives from a paying body money originating in the Consolidated Fund, but does not include in either case a body the accounts of which are subject to audit under section 2 of the Audit Commission Act 1988 or section 97 of the Local Government (Scotland) Act 1973 unless it is a body specified in section 98(I) of the National Health Service Act 1977.'.--[Mr. David Davis.]
Brought up, and read the First time.
2.15 am
Mr. David Davis: I beg to move, That the clause be read a Second time.
Mr. Deputy Speaker: With this it will be convenient to discuss the following: Government amendment No. 21.
Amendment No. 17, in clause 11, page 6, line 19, leave out from "(5)" to "shall" and insert--
Government amendment No. 25.
Mr. Davis:
The amendment tabled in the names of the right hon. Member for Swansea, West (Mr. Williams), the hon. Member for Newbury (Mr. Rendel) and myself is about protecting the rights of Parliaments and, thereby, taxpayers to have independent information about the way in which public money is spent. I have raised the matter before during discussions on the measure, and have listened closely to the Government's concerns.
I have reworked the new clause to address those concerns and to ensure that there are none of the undesirable or unintended consequences identified by Ministers in Committee. I travelled that extra mile willingly because I want to find a formula that is in the interests of Parliament, the Government and the taxpayer.
A fundamental point, which has not been well understood, is that the new clause does not provide a right for the CAG to roam at will. It is not a right for him to follow public money wherever it goes--desirable as that might be. It simply provides that, where the Government or funding bodies secure for themselves, through statute, contract or other means, access to a recipient of public money, the CAG's independent right of access will follow automatically.
The revised provision is even more limited than the version that I tabled in Committee. It includes restrictions on access in order to address specific concerns raised by the Government. It includes an additional subsection to make it perfectly clear that devolved matters are excluded. It even allows the Government a right of veto by order. That gives them a mechanism to deal with any case they identify--although I cannot imagine any--in which the CAG should have less access than the Government, or where his access should be subject to some proviso. I am in earnest about the new clause and want to find a way of framing it that will leave the Government content. In addition to the provisions that I have included specifically to help them, the interaction of my new clause with the commencement provisions in clause 27 would provide further flexibility.
The core difference between my access proposals and those of the Government lies in subsection (2) of my new clause. Access applies first to documents controlled by a Department; secondly, when a Department itself has access; and thirdly, when funding bodies further down the spending chain have access. Clause 27 will allow the Treasury to bring the Bill's provisions into force piecemeal. It could choose to bring in initially only the first part of my access provision, which is in line with its own, activating the rest after further consultation. The Financial Secretary raised the prospect of consultation, and I hope that that will take place and will be constructive.
The Government provision, which I shall discuss shortly, will close the possibility of addressing weaknesses in the Comptroller and Auditor General's access right until the next time that legislation on these matters is before the House. That may be many decades in the future. My provision would create the framework for the weaknesses to be addressed without further primary legislation.
We had a useful debate in Committee about what is now clause 8 and the Comptroller and Auditor General's right of access to information. It ran over two sittings and lasted for more than four hours, so hon. Members will be relieved to learn that I do not intend to repeat it here. I want to move the debate on, setting out specific concerns that the Government raised in Committee and demonstrating that my new clause would give no grounds for any of those concerns.
I shall start by briefly summarising events in Committee before I progress. I explained in Committee that the access clause is unsatisfactory for three reasons. First, it will make Departments the gateway through which the Comptroller and Auditor General must gain access to information whereas the original Exchequer and Audit Departments Act 1866 invested the powers of access directly in him. Secondly, it will repeal, without equivalent provision, a section in the Exchequer and Audit
Departments Act 1921 that is the only statutory basis for the Comptroller and Auditor General's rights to information on the many other accounts that he audits.
I am pleased that the Government have addressed those points in amendments to clauses 8 and 22, but they have failed yet to address the third and most important point that I raised in Committee. The clause will fail to update the Comptroller and Auditor General's access. It will leave him to face public audit in the 21st century with access rights developed to meet the needs of public administration in the middle of the 19th century. That is the fundamental flaw that my new clause is designed to correct.
I want to remind the House why we need the Comptroller and Auditor General to have access rights that extend outside Departments. My examples are those that I described in Committee, but I shall only summarise them here. Many functions of Government are now delivered outside the traditional public sector. Two main categories are particularly important. First, private sector companies deliver contracted-out activities--for example, PFI contractors to whom Departments are already committed to pay more than £70 billion in the next 25 years. Secondly, bodies in the independent and voluntary sectors provide public services funded by Government. For example, housing associations deliver on behalf of the Housing Corporation social housing programmes that are worth more than £1 billion each year.
Parliament has the right to expect the same standards of probity and regularity in the use of public funds however they are spent. Departments are still responsible for the way that the money is spent and they rightly insist on automatic access for their staff. The Comptroller and Auditor General can examine Departments' own checks on service deliverers, but that may not provide him with adequate evidence to reach an independent view. His professional view is that he needs access to audit Departments. Departments often agree, but the solution is piecemeal. The CAG must ensure that Departments secure access by contractual means. That is administratively burdensome; it diminishes the CAG's independence by making him dependent on Departments; and, where access is resisted, it impedes scrutiny by the PAC on behalf of the House.
I summarised in Committee some of the most notable examples of frustration experienced by the CAG and the PAC, caused by depending on arrangements granted at the behest of Departments and the Treasury. It took five years of negotiation before the CAG obtained access to the Housing Corporation and other executive non-departmental public bodies. The CAG was unable to provide the PAC with an assurance that Camelot had correctly handed over national proceeds from the lottery for four years because the company and its auditors refused to provide the evidence.
It took several years of negotiation before Government provided the CAG with access to training and enterprise councils, and Government refused the CAG access to private train operators despite the fact that the PAC considers that necessary to verify on behalf of Parliament that public subsidies have been earned. The Government fail to provide the CAG with powers to visit farmers, to check their claims--even though staff of the European Court of Auditors can visit UK farmers to check on EU money.
The CAG can examine only those registered social landlords--housing associations, in modern parlance--that volunteer access. In one case where an hon. Member brought irregularities to the attention of the CAG, it took six months for access to be arranged. The case is not the subject of a criminal investigation. That is an example of a lack of statutory access rights impeding the CAG's ability to respond to hon. Members who have concerns about the use of public funds in their constituencies.
There are related concerns about whistleblowers. Recent legislation named the CAG as a person to whom whistleblowers may disclose information and remain protected, yet the CAG does not have powers to examine allegations made against private contractors accused of misappropriating public funds--a case of fragmented rather than joined-up government.
Those examples show that the CAG needs access rights that extend beyond Departments and that it is not enough to rely on administrative means. I refer hon. Members who want more detail to the reports of the sixth and seventh sittings of the Standing Committee.
'The Treasury, a body which is designated for the purposes of section 10 and a person who acts as auditor for the purposes of section 10(2)(c) or (7)(c),'.
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