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Mr. Letwin: I hope that the hon. Gentleman will forgive the fact that this intervention has relatively little to do with his speech. The House may want to know that the Opposition will be more than happy not to divide the House if the Economic Secretary promises to follow the suggestion of my hon. Friend the Member for Macclesfield (Mr. Winterton) and refer the Bill to a Special Standing Committee.
Mr. Rammell: I am not sure whether I should give a response to that. It is a welcome suggestion. The criticism that has been made time and again of the Bill concerns the extent of the NAO's scrutiny powers, but that is not addressed in the reasoned amendment, so the Opposition's offer is a welcome, non-partisan move.
The changes will improve transparency and make it clearer what benefit the public are getting for the money raised through taxation. I hope and believe that that will inform future spending decisions and allocations.
The Public Accounts Committee has picked up the point that, once the changes are made, it is crucial that significant training and development are provided for both civil servants and Members of Parliament on the way in which the new rules operate. If we want everyone to understand the overall objectives, and to have an informed debate, it is crucial to ensure that everyone is up to speed.
I was particularly struck by the comments of my hon. Friend the Member for Workington (Mr. Campbell-Savours), who expressed concern that the Bill as drafted would weaken the role of the Comptroller and Auditor General and the National Audit Office. Given my hon. Friend's experience and expertise, we should all take that criticism seriously, but my right hon. Friend the Chief Secretary said that there is no change in the Bill to the role, power and responsibilities of the Comptroller and Auditor General. That gives some reassurance. The matter will certainly be taken up in Committee.
Concern has been expressed that the role of the National Audit Office and the Comptroller and Auditor General does not go far enough, in that there is no power to examine organisations that involve substantial sums of public money, such as the Student Loans Company and Remploy. I have much sympathy with that view, but that is the situation that obtains now. Nothing in the Bill would make that situation worse. A powerful case can be made for changing the auditing procedures, but that is not what the Bill is about. It is about the change to resource accounting, and that is one of the issues that should be picked up in Committee.
Another criticism was put forward by the hon. Member for Buckingham (Mr. Bercow), who is no longer in his place, about the working families tax credit and the overall argument that the Government can designate
particular items as taxation or public spending, according to their will--that the WFTC, by being designated as a tax cut as opposed to Government spending, artificially reduces taxation as a proportion of national income. The degree of concern expressed by the hon. Gentleman and other Opposition Members is undermined by the fact that for two thirds of the time in office of the previous Government mortgage tax relief was categorised in the same way, as were private medical insurance relief and life assurance premium relief. I hope that we can now put that issue to bed.
The hon. Member for West Dorset called for an independent accounts commission to bring clarity to the issue, reach agreed accounting standards and provide a firm statistical base on which to measure any changes the Government wish to make. That is an important issue, when one recalls how often the calculation of the unemployment figures was changed by the previous Government. However, I wonder whether the hon. Gentleman is committing his party to accepting in full the recommendations of such an independent commission. If not, I suggest that the novelty of his request is not what it might seem at first glance.
Mr. Letwin:
The hon. Gentleman may be sad to hear it, but the answer is yes. We commit ourselves lock, stock and barrel to the acceptance of the propositions put forward by Sir Bryan Carsberg and his colleagues on the committee, and to enacting those recommendations when we return to power in the next Parliament.
Mr. Rammell:
I would be interested to learn the terms of reference of that committee and its membership, to ensure that it genuinely is independent rather than something set up to achieve a specific purpose.
Mr. Letwin:
I hope that the hon. Gentleman is not calling into question the bona fides of the chairman of the International Committee for Accounting Standards, who is also probably Britain's most distinguished living accountant. He will be accompanied by senior partners from major accounting firms and others whose integrity is unimpeachable.
Mr. Rammell:
I do not question the committee's integrity, but the terms of reference and the overall membership could affect the outcome. The hon. Gentleman will need to convince us that the terms of reference and the membership were structured so that an objective outcome would result.
It has been said that the Bill would have been an ideal subject for pre-legislative scrutiny and I agree, especially as there is a cross-party consensus on it. That is when we are most in danger of allowing things to slip through. The Child Support Agency is one example of that happening, as we have learned to our cost. I understand the time constraints under which the Government have operated, but it would have been better if we could have created an opportunity for pre-legislative scrutiny.
The hon. Member for Kingston and Surbiton(Mr. Davey) said that it was more than 80 years since a Government had been defeated on a budgetary measure. That statistic demonstrates the power of the Executive over the legislature, and in response we need an honest and grown-up debate. One of the problems is that every
party in opposition calls for better scrutiny and suggests that it would be a good idea for the Government to be defeated on a financial measure, but every party takes a different view when in government. It would be a brave Government who said that they were relaxed about their estimates being defeated. [Interruption.] I see that my hon. Friend the Economic Secretary is concerned. I do not suggest that this Government need necessarily be that brave Government.
The hon. Member for Kingston and Surbiton also raised the issue of the allocation of proper resources for effective parliamentary scrutiny of accounting and financial issues, and that point is well made. He argued the case for increased resources for the Select Committee on the Treasury or the estimates office. One could also makethe case for additional resources for Members of Parliament--in office costs allowance rather than salaries--to enable them to perform the job of scrutiny on those issues. We get the parliamentary scrutiny that we pay for and, at the moment, it is inadequately resourced.
I welcome the establishment and funding of Partnerships UK. The private finance initiative is here to stay and can make a significant contribution to funding public sector projects. However, it must be done in the right way. There will always be a trade off between the cost of doing something through the private sector and the speed at which change can be achieved. The hospital building programme underlines that point. We must expand the knowledge and skills that are available to support PFIs. We often miss opportunities because the skills, experience and expertise are lacking. We also need a clear set of criteria for the way in which Partnerships UK will support PFI on the ground. A limited sum will be available--£170 million has been suggested--and it is therefore crucial that the projects that are supported are those with the greatest applicability and the most ground-breaking.
The Government propose introducing resource accounting to local authority housing finance and, as part of that process, removing rent rebates from housing revenue accounts. I am conscious that that is not specifically within the remit of the Bill, but as it establishes the principle of resource accounting, it will affect that initiative. It was announced by the Department of the Environment, Transport and the Regions last week that proposals would be published in line with the Bill. I strongly support the principle behind the proposed changes, because it is indefensible that under the current system rent payers--instead of the whole community through the general fund--bear the responsibility for funding rent rebates. The Government's proposals will address that issue, but in some local authorities--I declare an interest, because my local authority in Harlow is one of them--negative subsidy is transferred from the housing revenue account to the general fund and that transfer will cease. The process is an historical anomaly, and has been going on for nine years. It has been recognised and supported both by the previous Government and this Government. It affects a small number of local authorities--23 in total--but it has an enormous impact on them--in my local authority, £3.4 million out of a total annual budget of £13.5 million.
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