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3 Dec 2002 : Column 864—continued


Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a) (Money resolutions and ways and means resolutions in connection with bills),

Question agreed to.

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Estimates, 2001–02

10.27 pm

The Financial Secretary to the Treasury (Ruth Kelly): I beg to move,

The purpose of the motion is to provide for the correction of an error in the Appropriation Act 2002. The annual Appropriation Act provides statutory authority for the spending plans of Departments as set out in their Supply estimates. Since 2001–02, the Supply estimates have been presented on a resource basis, and the Appropriation Acts, which cover various aspects of departmental spending over a three-year period, have been revised accordingly.

In authorising spending plans as set out in the supplementary estimates for 2001–02, however, the 2002 Act failed to reflect fully the move to resource estimates. The Act omitted the changes to non-operating appropriations–in-aid set out in those supplementary estimates. Details of the Departments and amounts involved are set out in HC121. The omission is in urgent need of correction. The 2001–02 accounts are in the process of being audited by the National Audit Office, which is signing off any departmental accounts affected by the error on the understanding that statutory authority to regularise the spending will be sought at the earliest opportunity. The procedures for drafting and checking the relevant draft legislation are being revised to help ensure that such an omission does not occur again.

I assure the House that there is no intention to provide new cash or resources for Departments. The purpose of the motion is simply to provide for the proper statutory authority for spending, as presented to Departments in their 2001–02 supplementary estimates and voted on by the House in the context of motions tabled on 11 December 2001 and 7 March 2002.

Peter Bottomley (Worthing, West): Is the Minister essentially saying that this was a £3,000 million mistake?

Ruth Kelly: I am telling the House that non-operating appropriations-in-aid were not underpinned by the necessary statutory authority.

I commend the motion to the House.

10.29 pm

Mr. Mark Prisk (Hertford and Stortford): I begin by thanking the Financial Secretary for her statement, although I should say that it was as interesting for what was left out as for what was kept in.

Opposition Members recognise that, where errors of this nature arise, they need prompt correction, so we welcome the opportunity to debate these estimates without restriction to a particular hour. I shall of course not detain the House any more than is necessary, but quite whether my colleagues will wish to raise important supplementary questions is entirely a matter for them and for you, Mr. Deputy Speaker.

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From what the Financial Secretary did say, it is clear that errors have arisen in both the drafting and the checking of the original legislation. Some may argue that the fault rests with the parliamentary draftsman or with the Clerks. However, I do not know whether that is true in this instance, because the relevant information was not provided in the ministerial statement. Whether it is true or not, the ultimate responsibility for Government business that passes through this House must rest with the sponsoring Department—in this case, the Treasury. So I do hope that the Financial Secretary will, in her reply to this debate—whenever that may take place—accept that final responsibility for these errors rests with her and with the Treasury, and not simply with the parliamentary draftsman or with the Clerks.

On first reading, the omissions in the current appropriations legislation may seem minor and obscure—particularly at this time of day—but they are in fact of considerable importance. They mean that the 2001–02 winter-spring supplementary estimates have, strictly speaking, no statutory authority. Thus any Government spending that has drawn on these estimates is, in effect, irregular and illegal. The omissions also mean that, at the moment, it would not be possible for the National Audit Office to finalise the Government's accounts for the past financial year, because of the irregular nature of the resources involved. Given these problems and their significance for the public finances, I should appreciate it if the Financial Secretary provided the House with some assurances.

Further to the Financial Secretary's opening remarks, can she confirm that this motion represents merely a correction in respect of the statutory authority, and that it does not represent any change in policy—which she did not mention—or in the amount of resources or cash allocated? Secondly, is she certain that the only Departments and Government agencies affected are those listed in appendix A to the motion, and can she confirm—despite her attempt to avoid the question from my hon. Friend the Member for Worthing, West (Peter Bottomley)—that the sum involved is indeed £3,000 million, roughly speaking? Is she also aware that appendix A appears to contain an error in respect of the figure allocated to the Department for Transport, Local Government and the Regions? Is that figure £2 and 6.8p, or is it in fact £2,068,154,000, as is printed in the document? I am afraid that the problems are beginning to pile up. The concern is the trustworthiness of the document before us. Given that its purpose is to correct an error in the first place, I hope that the Financial Secretary will treat the matter properly.

Thirdly, can the Financial Secretary confirm that these capital—or non-operating—resources include activities such as public-private partnerships and private finance initiative schemes, as well as other contracts with business suppliers? If so, what is the current legal status of those contracts? I ask that particular question because anyone in private business knows that they would face severe personal and regulatory penalties for entering into a commercial relationship without due authority.

Indeed, one of the criticisms of those behind the World Con and Enron scandals was that they entered into contracts when they did not have the appropriate money to do so. If the Minister is telling the House that Government Departments have bought goods and

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services and have entered into contractual relationships backed only by resources that are irregular and illegal, many people—including business people—will want to know why. They will also want to know who in Government will take responsibility for the blunder.

I hope that the Financial Secretary will explain to the House the legal status of contracts backed by irregular resources, and whether there are any other financial or legal ramifications of the error of which the House should be advised.

Peter Bottomley: Will my hon. Friend ask the Financial Secretary to say, when she responds to the debate, whether the £2,000 million for the Department of Transport is disputed accountancy regarding the money to be provided to the successor to Railtrack, or whether that is still to come in some other supplementary estimate?

Mr. Prisk: I am grateful to my hon. Friend, who as usual asks a pertinent question. I am sure that the Financial Secretary will be only too pleased to answer it when her turn comes.

Six days ago, the Chancellor came to the House to present corrected borrowing and growth figures, having got his sums wrong earlier in the year. Today, the Financial Secretary has had to come to the House to correct legislation that has rendered some Government expenditure illegal and irregular. Opposition Members will support the prompt correction of any errors, and will not oppose the motion. However, we expect the Financial Secretary to acknowledge the importance of the error, and to accept her responsibilities and those of the Department. We also expect her to answer our questions in full, and to explain why the once trusted work of the Treasury has become unreliable.

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