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3 Dec 2002 : Column 874—continued

11.3 pm

Mr. Edward Leigh (Gainsborough): I should like to return to the motion. I wish that I could agree with the hon. Member for Thurrock (Andrew Mackinlay) that high constitutional matters are at stake, but perhaps I can give a simple explanation. I am not sure that it is my job to ride to the aid of the Government, but in the interests of fairness, it is my duty as Chairman of the Public Accounts Committee to explain to the House what has happened.

The need for the motion has arisen, as the Financial Secretary has told us, because of the omission, in error, of details of non-operating appropriations-in-aid from the relevant schedules to the Appropriation Act 2002. The omission arose from an administrative error on the part of the Clerk of Supply, which was not spotted by the Treasury when it checked the Bill. There may, therefore, be some fault inside the Treasury, which we may need to examine in future. I very much doubt, however, that that fault went all the way up to Ministers—I would be surprised if it did.

The error was caused by changes made to the form of the Appropriation Act 2002 that resulted from the change to resource-based Supply. You may know, Mr. Deputy Speaker, that we are changing all Government accounts over to resource accounting and that has caused difficulties for Departments.

Michael Fabricant: Will my hon. Friend give way?

Mr. Leigh: I shall carry on for the moment, as I am anxious to explain these matters calmly.

I have spoken today to the Clerk of the Public Accounts Committee, the National Audit Office and the directors responsible and, in my view, the error is not in any way attributable to the Government, but the motion is necessary to rectify the situation. Appropriations-in-aid are revenues that Departments generate and that they are authorised to retain to finance expenditures

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over and above those financed from the consolidated fund. In other words and to explain it simply, if they have sold land, for instance, and want to keep the money in the Department, they can do so. The omission of references to these amounts in the Appropriation Act 2002 meant that the utilisation of these amounts had no statutory backing. That is why the motion is before us.

However, to be fair to the Government, it is important to note that the relevant information was laid before Parliament in the winter and spring supplementary estimates, voted on and approved. I do not think that anything has been kept back from the House of Commons, and I say that because I would not like the House, which should treat estimates seriously, to think that it has been kept in the dark.

The National Audit Office has been in discussion with the Clerk of Supply and the Treasury on the most appropriate way to give statutory backing to these amounts and so that the administrative error can be righted. The motion seeks to achieve that goal. I have discussed it with the National Audit Office and it has asked me to say that it has sought action to be taken as swiftly as possible because many departmental resource accounts are affected and are in the process of being finalised. In the meantime and in anticipation of the action that I hope that we shall take tonight, it has agreed for additional disclosure to be included in the accounts of the affected Departments. On that basis alone, it is comfortable that there is no need to qualify the accounts of the Departments.

In summary, it is the view of the National Audit Office that this motion is an appropriate course of action to rectify the effects of an administrative error by the Clerk of Supply. In fairness to him, he has written a memorandum to my Committee and I see no reason not to read it out. He says:

That is a very generous apology. We should leave the matter there.

11.8 pm

Peter Bottomley (Worthing, West): I am glad that my hon. Friend the Member for Gainsborough (Mr. Leigh) spoke in the way that he did. It is clear that we are not dealing with the general question of whether the House should approve line by line every part of Government expenditure. If that were the proposal before us, I would oppose it, because Members of Parliament and groups of Members of Parliament would go in for the type of pork-barrel politics that is not one of the greatest features of the American system. The fact that we can argue for our constituents' or other interests is important, but line-by-line approval of spending is not necessarily, on balance, a good thing.

The hon. Member for Thurrock (Andrew Mackinlay) has probably found his way into a dictionary of quotations when he talked of rubber stamping tablets of stone. That expression will be remembered—especially if I have anything to do with it.

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The Financial Secretary moved the motion properly. The combination of what she and my hon. Friend the Member for Gainsborough said spelled the position out clearly. Even from the limited notes in appendix A, it is clear what happened. The House knew what it was doing, and the Financial Secretary has spelled out that there will be no extra spending. The only point that I wish to add is to ask whether it is possible to find a better expression than non-operating appropriations. If it is not capital spending or capital receipts, what is it? To say what it is not does not tell us what it is. I hope that the plain English campaign in the Treasury will deal with that point.

Andrew Mackinlay: I accept what the hon. Member for Gainsborough (Mr. Leigh) said. However, a serious point is involved. My hon. Friend the Financial Secretary could have said the same thing and/or it could have been made clear in an explanatory memorandum. If we had been given the logical explanation, we would have avoided much understanding. The title of the document does not mean anything to anyone; it is gobbledygook.

Peter Bottomley: I agree that the debate is useful because things should not pass through the House without hon. Members understanding what is happening. The Minister should be congratulated, however, because it was better to hear the full explanation from my hon. Friend the Member for Gainsborough (Mr. Leigh), who is Chairman of the Public Accounts Committee. That courtesy to the House is appreciated.

11.10 pm

Michael Fabricant (Lichfield): I welcome the brief opportunity to speak. I thank my hon. Friend the Member for Gainsborough (Mr. Leigh) for clarifying the situation. We often receive estimates for billions of pounds, which is not our money, but taxpayers' money, that we rubber stamp with little understanding of what we are agreeing to, as the hon. Member for Thurrock (Andrew Mackinlay) said.

I understand that the problem was due to an accounting error because of the Government Resource and Accounts Act 2000, which sets out the new Treasury accounting procedures. Will this be the last time that the Minister comes to the House to ask for an amendment to be made because of an accounting error? I accept that it may not be, and we need to understand the situation fully.

I disagree ever so slightly with the hon. Member for Yeovil (Mr. Laws). Although I was not in the Chamber, I listened to the Minister and am not altogether sure that she apologised. Although I do not think for one moment that she is personally responsible, or even that her officials are responsible, at the end of the day we are discussing £3 billion of taxpayers' money. There are many reasons why hon. Members are sent to the House. One of them is to look after taxpayers' money and how it is spent.

Peter Bottomley: The sense of my hon. Friend's comments may be right, but I suspect that we should pay

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attention to the fact that the error was made in the House. I am pretty certain that it was detected in the Treasury.

Michael Fabricant: That is reassuring, but the appropriation is generated from a Treasury motion. I am sure that the Minister will confirm that. To echo what my hon. Friend said, I, too, am grateful that the Chairman of the Public Accounts Committee set the record straight. But why should my hon. Friend the Member for Gainsborough be the patsy? Surely the Minister should have explained the problem fully. As the hon. Member for Thurrock said, there should have been a clearer explanation on the Order Paper and in connection with Command Paper 121. It is not clear what precise moneys we are talking about and how the situation arose.

This is a brief but important debate. I reiterate that we are talking about £3 billion of taxpayers' money. Although the money was not lost, we have to account for it, and it is right and proper that it be debated. I hope that the Minister will reassure us that the problem will not happen again.

11.13 pm

Ruth Kelly: With the permission of the House, I thank hon. Members for their commendable interest in the debate. I want to pay a special tribute to the hon. Members for Gainsborough (Mr. Leigh), the Chairman of the Public Accounts Committee, and for Worthing, West (Peter Bottomley). They brought great experience and maturity to the debate. Much as I enjoyed the other contributions, especially by my hon. Friend the Member for Thurrock (Andrew Mackinlay), the hon. Member for Gainsborough in particular set out in detail why the motion has been tabled.

I was not aware of the letter of apology by the Clerk of Supply. I agree with the hon. Gentleman that it is a very generous apology, and the House should recognise that.

I accept responsibility for the fact that the matter was not picked up during the Treasury's checking procedure. The Treasury was the first Department to notice the error, but clearly it did so after the event rather than before the original votes had taken place. Procedures will, of course, be tightened up, and I am sure that much more attention will be paid to such issues in future.

This particular issue arose, as the hon. Gentleman set out so clearly, because 2001–02 was the first year of the resource estimates, and the Appropriation Act 2002 failed to reflect the changes required. Under cash-based supply there was only one type of appropriation-in-aid, whereas under resource supply we have operating, relating to resource income, and non-operating, relating to capital income, appropriations-in-aid. The 2002 Act included authority only for the operating appropriations in aid. The National Audit Office, although concerned about the lack of statutory underpinning, has accepted the income and expenditure in the accounts that were presented on the basis that the

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problem resulted from an administrative error, that Parliament has had the estimates laid before it and that it has voted on them.

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