| Previous Section | Index | Home Page |
7.21 am
Mr. Tim Collins (Westmorland and Lonsdale): It is axiomatic that the central purpose of this place is to hold the Executive to account, principally on public expenditure. Therefore, as has been widely said in the debate, the Bill is important. I agree with my hon. Friends that, on balance, it improves matters rather than making them worse.
However, I wonder whether, even with the Bill, we have set the highest standards that should apply. The standards of accounting in the public sector should be clearly and demonstrably higher than those applying in the private sector. If we deal with private sector companies, we almost always do so by choice, as a voluntary act, whereas when we deal with public expenditure, we deal with moneys that are gathered by compulsion, with the perceived threat that refusal to pay for that public expenditure could lead to prison or to the full sanction of the law, and ultimately force, being deployed.
I have some concerns that even though the Bill has been improved during its passage through the House, it falls short of the highest standards that we might expect of it.
I welcome the fact that, in his speech on Third Reading, the Chief Secretary referred to his intention to revolutionise the arrangements that he had inherited and
which date back to the time to Gladstone. This Administration, with Lord Jenkins as their ideological mentor, usually favour perpetuating anything to do with the regime of Mr. Gladstone.
We have seen that across the board the Government are following the Gladstonian example, slashing defence expenditure, undermining the integrity of the United Kingdom, pursuing a botched foreign policy, and radicalising for the sake of it. I welcome anything that results in moving away from Gladstonian principles. [Laughter.]
I notice that the Liberal Democrats laugh at that. I note that the example given by the hon. Member for Kingston and Surbiton (Mr. Davey) of the last time that the House rebelled against outrageous Government expenditure occurred the last time that we had a Liberal Prime Minister. Perhaps that is a coincidence, perhaps not.
Mr. Edward Davey:
May I point out to the hon. Gentleman that the last two occasions on which the House reformed the public accounts were under a Liberal Prime Minister as well?
Mr. Collins:
That may well be true. The question is what principles underlay the reforms. Perhaps we should not go back into the history of that because, as the hon. Gentleman knows, that Liberal Prime Minister produced another constitutional innovation. When he was replaced by a Conservative Prime Minister, the Conservative Prime Minister had to introduce emergency legislation to prevent the sale of honours, which was the practice of that Liberal Prime Minister.
I was interested in an earlier remark by the hon. Gentleman. He said that he hoped that one of the changes that would come about as a result of the Bill would be that it would cease to be as easy as it has been to cut public expenditure. He suggested that that was particularly relevant to capital spending, and said that it had been too easy in the past to cut capital expenditure.
Given the history of the past 80 or 90 years, the progression of public expenditure and the ever-greater share of national income consumed by the public sector, many of us, at least on the Conservative Benches, would question whether it has indeed been too easy to cut public spending.
If the system moves towards a better basis for deciding on the allocation of resources in the national economy, I hope that that will not be on the presumption that more should be spent, rather than that the amount spent should be spent more efficiently. Ideally, less should be spent and more benefit should be derived from it, which is what the private sector is expected to produce day in, day out.
My right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) made a series of interesting contributions, which fulfilled the PAC's remit. I share his view that the PAC has done its duty to the House and provided excellent recommendations and reports on a non-partisan, cross-party basis. He pointed out that one of the tests of the measure's effectiveness was whether we genuinely moved towards evidence-based policy. It is important to seize the opportunities that the Bill presents. The Chief Secretary is keen on that, and I hope that he will be able to do that, not least in the review that he recently announced.
I suspect that the Government will receive a mandate later in our proceedings. They must recognise that it is a mandate for a rolling review process. They will not receive a mandate on the basis that the measure is perfect as it stands. I hope that a rolling review process will be established.
I am worried that some of the characteristics of the usual process of modernisation are inherent in the Bill. In that, perhaps I am less generous than my hon. Friend the Member for West Dorset (Mr. Letwin). The Government often use the word modernisation; I am sure that they would use it to describe the purpose of the Bill. Modernisation often becomes a cover for a reduction in Government accountability for their actions to the House and the electorate. Several contributions have made clear the way in which the Bill may undermine the Executive's responsibility to the House. The Public Accounts Committee said that it was worried about that.
I accept that the Bill has changed, and the Chief Secretary pointed out that several concessions had been made. However, the December report of the Public Accounts Committee states that the Committee was worried that the Bill might lead to
We should also be worried about another constant feature of the modernisation process: the reduction in the powers of the House. During the debate, we have heard examples of the way in which the powers of the House might, at most, be left as they were, but might also be undermined. The list of concessions that the Chief Secretary invited the House to welcome included a statement in the Bill that the Comptroller and Auditor General acts on behalf of the House. That is not a concession; it ought to be an acknowledgement of principles that were always important. I worry if the Chief Secretary believes that we should be grateful for that.
The Bill might constitute a further example of the way in which systems that had the merit of tradition and of having been proved in practice are replaced by some form of experimentation. I share the anxieties of the Public Accounts Committee about whether the new system will be ready to operate when the old system is phased out. The worst circumstances for starting resource accounting are those in which Departments are not ready to begin. The number of Departments that were clearly not ready for the new system at the end of last year is worrying. Several of the accounts of Departments that tried to move on to the new system had to be qualified. That does not inspire confidence.
The final example of modernisation and the way in which it might apply to the Bill is that, all too often, one finds an agenda behind Bills to increase the power at the centre of Government. Many hon. Members have mentioned the balance between the Executive and the legislature. However, within the Executive, we are moving steadily away from the principle of the Prime Minister being primus inter pares towards Downing street being all powerful. The Bill refers constantly to the Treasury, but we all know who the First Lord of the Treasury is.
A number of us would be concerned about anything that gives the Treasury, broadly interpreted, immense power to be judge and jury in its own cause and able to decide, for example, whether performance targets have been met, or whether progress is being made towards them. In an era in which there are vast strategic communications units at No. 10 Downing street, an era of spin, we would feel anxiety about whether the legislation properly balances the structures of our government. As I have said, the balance must be within the branches of government as well as between them.
It is a reasonably safe prediction that before noon the Government will have their way on this legislation. Before that happens, we need to put on record as a House that we welcome the legislation, to the extent that we do, simply on the basis that we believe that anything that produces greater clarification for our constituents must be a good thing; that we all welcome anything that makes the Executive feel in practice, if not in theory, that they need to account for themselves properly to the legislature; and that they are being given a very qualified mandate, partly on the basis of the concessions they have already made and partly on the basis of the review that they have announced.
Mr. David Prior (North Norfolk):
I do not have much to add to the comments of my hon. Friend the Member for West Dorset (Mr. Letwin), but I think it is worth mentioning that I am probably one of the very few people in the House, certainly on this side, who have worked for a nationalised industry and have experienced the problems of cash limits and cash accounting at first hand.
The failure to distinguish between revenue and capital spending has dogged Governments for many years and encouraged them in many wrong decisions. It is extraordinary, though, that in 2000 we should be debating in this Chamber the merits of having profit and loss accounts, balance sheets and a proper cash flow statement for the public accounts.
I would add in passing that we should never place too much confidence in any accounting system. All that a good accounting system does over a bad accounting system is to reduce the amount of detective work required to establish what is going on.
I wish to mention just three aspects of the Bill. First, no accounting system, however good, is a replacement for good government. Difficult decisions will have to be made in the future, as they were in the past. The accounting system may be an aid to good government, but it will not make difficult decisions any easier to make,
particularly with the pressures that Government have on revenue and current spending over long-term capital spending.
In an earlier debate, my hon. Friend talked about the water industry and the way in which it was allowed to run down over many years. It ran down not because we did not have an understanding of depreciation, but simply because Governments of both colours felt that pressure on current spending was that much greater than the longer-term requirements of the water industry.
a reduction in the effectiveness of the House's arrangements for controlling public expenditure and for holding government departments accountable for Supply.
We should be extremely worried about that.
| Next Section
| Index | Home Page |