| Previous Section | Index | Home Page |
Mr. David Davis: Will the right hon. Gentleman give way?
Mr. Smith: Before I give way to the right hon. Gentleman, I greatly welcome his acceptance to serve on the steering committee of the body that will direct the review.
Mr. Davis: I am minded to do that, but obviously we have to have a discussion first about some of the details; the right hon. Gentleman understands that. I warned earlier that I would raise one question with him on the
review because of some misreporting in today's Financial Times. Will he confirm that the review's aim is not to amalgamate the NAO with the Audit Commission?
Mr. Smith: That is not the aim. I am pleased to give that assurance, although, as the right hon. Gentleman pointed out in the debate on new clause 4, the ways in which the NAO and Audit Commission collaborate are properly a subject for consideration, as they have been in the debates. It is bound to be touched on in the review.
I underline the fact that it is a good Bill. It brings in resource accounting, which offers a great step forward both in the ability of the Government to conduct their business in the service of the public and in the ability of the House to scrutinise Government. It creates Partnerships UK, which will greatly improve services to the public and give rise to innovative ways in which the private and public sectors can work together to the benefit of us all.
Mr. Letwin:
In order not to be churlish, I suppose that I should start by thanking the Chief Secretary to the Treasury for his thanks to those who were on the Committee. I echo his kind words to the staff, to the other people who have been kept up all night and to his officials, who have shown forbearance and worked hard in producing the Bill. I go one step further and welcome, as we have from the start, with our colleagues in the PAC and the Liberal Democrats, the principles that underlie the Bill. I will not indulge in similar point scoring--
Mr. Andrew Smith:
The hon. Gentleman has no points.
Mr. Letwin:
If the Chief Secretary tempts me, I shall, but I will try to avoid the temptation.
As the Chief Secretary knows, the movement towards resource accounting has been a bipartisan, indeed tripartisan, affair. It began at a time when my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) was Chancellor of the Exchequer, and it has continued apace under the current Government. We all welcome the basic ideas.
I take those basic ideas to be, first and most importantly, the production for the Government of a straightforward consolidated profit and loss, income and expenditure statement; a balance sheet, critically; and a cash flow statement. They offer the opportunity for Parliament and informed commentators, and perhaps even eventually for a wider part of the electorate, to understand--for the first time, in a form that is comprehensible to the ordinary person, including the ordinary Member of Parliament--roughly what is gained and what is spent by Government. That is an unambiguously good thing, and we are all in favour of it.
Secondly, one of the cardinal features of resource accounting is that it seeks to establish an asset base and to examine how well that asset base is being used. That,
of course, is highly allied to the matter of performance measurements, to which I want to return. However, the principle that the Government should try to identify the assets that they are using on behalf of the taxpayer--and to which the taxpayer has inevitably contributed, either immediately or in a delayed fashion through borrowing--is unambiguously a good thing. It is good that the Government should know how the assets that they control on behalf of the taxpayer are being used, and whether those assets are being well used.
Finally, I take it that the point of resource accounting is that, allied to the measure of how the money is spent and what money is taken, there should be a measure of whether the money that is spent is achieving the things that it is intended to achieve. That is also a step forward, because--until very recently, but increasingly--it has not on the whole, oddly enough, been the practice for Governments to concern themselves with the simple question of whether the money that is being taken and spent is being spent in any way usefully when compared with the Government's policies.
We all accept those principles. So far, we are in utter harmony. I regret to say, however, that the harmony ends there. This is not only in principle a good Bill, it is also in practice a tissue of missed opportunities--which I do not think are politically inspired. I do not think that they have anything to do with the politics of the current Government or of any other Government. I freely admit--this is why I say that I shall not trade insults with the Chief Secretary--that the previous Government, and Governments before that, for years and years, have been culpable in just the same way.
It is tempting for the Executive to try, in a shortsighted fashion, to protect themselves from proper scrutiny. It is tempting for them to try, in a shortsighted fashion, to redefine matters so that they can present them in ways that sound attractive. As I, the hon. Member for Kingston and Surbiton (Mr. Davey) and many Public Accounts Committee members have tried to expose, it is a temptation that, in the long run, benefits the Government no more than it benefits Parliament or the people. In the short term, however, it seems to provide benefits. That disease afflicted not only the previous Government, but other Governments past. It also afflicts the current Government.
The result of succumbing to the temptation is that, in six or seven fundamental respects, the Bill--because the Government have not accepted amendments and new clauses that they should have accepted--is woefully deficient. There will come a time, I hope not far off, when that deficiency will be sufficiently examined by people in another place who are independent of the Executive, so that the Government have to face the prospect either of accepting the amendments and new clauses--or something very much like them--that they have refused in this place, or of eventually using the Parliament Acts to overrule them.
I reiterate that I do not believe that it can be in the interests of the Government, let alone the rest of us, that they should use the awesome power of their majority in the House and of the Parliament Acts to try to enforce systems that narrow-mindedly and shortsightedly protect the Executive from proper scrutiny. That is a most remarkable abuse of a parliamentary majority, and I hope that the Government, when it comes to it, will not do it.
I say that it is an abuse of a parliamentary majority because it is proper that a parliamentary majority should be used to push through a Government's programme when their political opponents disagree with them. That is why a Government are elected, and we have no quarrel with that. We may disagree with the substance, but, as a matter of process, it is entirely proper that a Government should use their overwhelming majority, if they have one, to force through policy measures in which they believe.
In this case, however, we are talking not about the new Labour Government doing something in which they believe and using their majority to achieve it, but about the Executive using the power of the Whips to make Parliament do something that is the interests of Parliament and of the people who elected it. That is an abuse of Executive power and I shall go on saying so no matter how much merriment it causes on the Treasury Bench. More importantly, my words will be echoed in another place and there will be a fight--oddly enough, a fight between the Executive, represented in this place, and the electorate and Parliament, represented in an unelected place. If the Chief Secretary cannot see that that is an irony, he is a lesser man than I think he is.
The Bill is lamentably deficient in six or seven respects and constitutes a tissue of missed opportunities. The first such respect is the simplest and the most important. It is an astonishing departure from rationality that a Bill that purports to be--and on the whole intends to be--a framework for normal and proper public sector resource accounts should enable the Treasury to set definitions and standards on a political whim. Ministers have entirely failed at all stages of the Bill to make a powerful or even remotely plausible argument that that is the proper way to proceed. That is why that aspect of the Bill has failed to attract support not only from the official Opposition, as one might expect, but from the Liberal Democrats, from the PAC and, I suspect--and in one or two cases I know--from Labour Members.
Ministers have been unable to bring forward arguments against the proposition that an independent body should set the definitions. That is not because Ministers lack ingenuity, but because there is no such argument and there can never be one.
The second lamentable deficiency in the Bill relates to enforcement. The PAC, supported by the Conservatives and the Liberal Democrats, has made repeated attempts to insert provisions for the Comptroller and Auditor General to have a universal scope of audit across the public sector and the quasi-public sector, with the sole and perhaps unfortunate exception of companies. We must give the Government credit for having made some movement. They have tried to accommodate the force of our arguments, but, for some reason that remains mysterious, they have not wholly accommodated them and we are left with a position in which the much trumpeted studies that the Chief Secretary is going to conduct and in which my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) may well participate could result in nothing changing and the CAG remaining unable to audit a large stretch of the public and quasi-public sectors. That is clearly unsatisfactory. There is no good argument for it
and none has been put forward. The reason, again, is not a lack of ingenuity, but that no good argument can be put forward.
The third serious deficiency relates to the access of the CAG. I shall not unnecessarily bore the House by repeating the same points, because they apply in exactly the same way as they do to audit.
The fourth issue is the terrible problem that the performance measurements, which could have been added usefully as part of the resource accounting process, will be added uselessly, because the Treasury will be judge and jury. It is right and proper that the Treasury should be allowed to determine the policies, but it is wrong that it should be allowed to determine the measures of the success of policy. Most importantly, it is unambiguously wrong that it will be able to decide whether the performance measures have been met. It is a pity that, in this short-sighted attempt to protect the Executive against proper scrutiny, a system is being set up that will make it difficult to cure the problem in subsequent legislation. It will be cured in the long run. As the hon. Member for Kingston and Surbiton constantly points out, we have a sterling example in New Zealand, which shows that when people start down this line of thought, they eventually get to the end of it and insist not just on independently verified definitions for accounts, but on independently verified and validated performance measures. We shall get there in the end, but it is a pity that the opportunity in the Bill is being missed.
Finally, we have the problem that, although the Bill is about resource accounting, another item has been insinuated into it. According to one's taste, it is either distasteful or harmless and, although it bears no particular relation to the Bill, it has driven much of our consideration. I suspect that the Government's helter- skelter attitude to much of the drafting has been driven exclusively by clauses 16 and 17. I do not know the reason for inserting those clauses into the Bill--except, perhaps, a polite sense of irony on the part of the draftsman, who wanted to prove the difficulty of the definitional point by including a body that incorporates practically all the problems to which the rest of the Bill gives rise. Other than that, I can see no particular reason for including the body in the Bill. However, having put it in the Bill, it would have been better to limit it properly.
It is much to the credit of Treasury Ministers that they have made some major concessions and imposed some limits. It is a pity that some of the limits do not seem to apply fully and some of the statutory protections that were asked for have been turned into administrative assurances.
We shall have to wait and see. The proof of the pudding will soon be apparent. We shall see whether this body turns into another National Enterprise Board and ends up with huge guarantees, loans and investments, but carries out what are known in the jargon as the downstream activities of the PPP, in which case it will come a cropper and pick losers as every other such body always has, or whether it will be a genuine facilitator and an extension of the Treasury task force, in which case it will cost much less than £400 million in the long run and perhaps do some good. We shall see. The Bill is inadequate in the constraints that it imposes. It may or may not be inadequate in the outcome.
Having said all that, there is something going on here which is not a matter of party politics, but is associated with a view of Government that Governments ought not to have. I admit that other Governments--including Conservative ones--have frequently adopted the same view, but that makes it no better. It is not a sufficient retort for the Chief Secretary to say that others have suffered from the same disease. For a person who is engaged in burglary to say that his action is entirely legitimated by the fact that the policeman is an ex-burglar is not a sufficient argument. We have been to jail. We have been well and truly thrown out by the electorate, and the Chief Secretary and his colleagues are now the Executive. Their job is to try to make sure that the great bureaucracy of which they are in charge does not allow or force them to indulge in manoeuvres that protect the Executive from proper scrutiny. That is what is going on throughout the Bill.
| Next Section
| Index | Home Page |