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Mr. Wiggin: While the hon. Gentleman was chuckling to himself, did he consider the difference between audit information and the Official Secrets Act?

Lembit Öpik: Yes, but until now, the hon. Gentleman made no distinction between whistleblowers who are acceptable and those who are not. He begins to box himself in if he claims that whistleblowers on audit information should be given more latitude than those who have a similar, principled concern about official secrets. One could go as far as to say that whistleblowers violate the Official Secrets Act in the public interest because they feel a greater moral imperative than someone in an audit office, and that they therefore act extremely nobly.

Mr. Wiggin: I am nervous about straying out of order but the hon. Gentleman should consider the difference
 
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between the Official Secrets Act, which seeks to protect our servicemen and their lives, and audit information, which under the Bill, is likely to be relevant to local authorities and the way in which they spend public money.

Lembit Öpik: We could go on about different levels of whistleblowing, but the hon. Gentleman makes a fair point and I shall not play games. There are different levels, but I am encouraged by the Conservatives' recognition that there are times when people should be entitled to blow a whistle without recrimination from Government. That must be good news for whistleblowers everywhere in the Conservative party. If they have information that could be in the public interest, they might even be entitled to a community service award for blowing their whistles.

I have one last thought about clause 54: the only thing that the Minister did not explicitly describe was the mechanics of ensuring that the clause is brought into line with the promises that he made today. I would be grateful if he could briefly outline the input that the House will have into the changes that hon. Members on both sides agree will be useful.

I can say without fear of contradiction that this is the greatest Public Audit (Wales) Bill ever to be laid before the House. Although it might not set the good people of Montgomeryshire alight with excitement, they stand to gain from it practically through a more rational, strategic and simplified approach to cross-border auditing. If the Bill is successful in its goals, I fully believe that it will help us to have a sound and sensible public audit of public money, and that it will ensure that the audit process is done once rather than twice, as it is at present because of the duplication in the system. We shall probe some minor changes in Committee, but I am satisfied that there will be enough time to do that under the programme that the Government are proposing. For that reason, the Liberal Democrats support the Second Reading.

2.21 pm

Mr. Alan Williams (Swansea, West) (Lab): I welcome the consensus on the Bill. In my Liaison Committee role, I see part of that being attributable to its having had a pre-legislative and draft legislative stage. Strangely enough, that was common practice in the 19th century. It was dropped in the last century and has been embraced again by the previous and current Leaders of the House with the full support and encouragement of the Liaison Committee.

In a different role, as the Chairman of the Public Accounts Commission in this House, may I say how welcome it is to have this additional armament relating to the scrutiny of public expenditure? It has always been a criticism of the Public Accounts Committee—a remarkable Committee on which I have served for 14 years—that it can deal with only about 50 reports in a year. With £650 billion worth of public expenditure and income to scrutinise, 50 inquiries a year can obviously only scratch the surface. As someone who was, and is, no enthusiast for devolution, may I give it one point of credit for having enhanced public audit in this country? Scotland and Wales, which previously had perhaps only one or two inquiries into their expenditure during the year, now have their own respective bodies. I welcome this strengthening of the organisation in Wales.
 
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In fact, public audit to some extent rebuts the argument that we do not get anything for nothing, in that the National Audit Office has claimed for years that it makes enough savings to reclaim its costs eightfold each year. The hon. Member for Bridgwater (Mr. Liddell-Grainger) asked who audits the auditors, so he might be interested in this. As Chair of the Public Accounts Commission, I set up an independent value-for-money audit of the National Audit Office, which has reported in the last couple of weeks. That report confirms the NAO's own estimate that it makes eight times as much for the taxpayer as it costs the taxpayer. I hope that the Bill will create a similar experience for Wales.

Like the Under-Secretary of State for Wales, my hon. Friend the Member for Islwyn (Mr. Touhig) and those new converts on the Conservative Benches, I have a great sympathy for whistleblowers. I remember that, when Rhodri Morgan was in this House, he had a system whereby his telephone was linked to the fax machines in the Wales Office. In some way, whispers used to get to him about what was going on in Wales. On one occasion, he came to see my hon. Friend the Member for Pontypridd (Dr. Howells)—who was also on the Public Accounts Committee at the time—and me. A group of civil servants had asked whether they could meet the two of us because there was something going on in the Welsh Development Agency that they felt needed to be exposed.

We offered to meet the civil servants in Cardiff, but they said, "No, we're known in Cardiff. We'd be recognised there, and you'd be recognised there. Can we come to London?" So we met them in one of the "W" rooms here. We were about to produce a report from the National Audit Office on excessive car expenses in the WDA, and these two WDA officials came to us and said, "Look, we'd better tell you what's going on there, but you mustn't say where it came from." What they exposed was a conspiracy to privatise two sections of the WDA: the property section and the consultancy section. Feasibility studies had been commissioned on that proposition, yet there was not one word of record of them in the minutes of the board, though the board was involved. There was no record of feasibility studies where one might expect to find them because they had been farmed out to irrelevant divisions in the WDA. One head of a division was so worried about what was going on that he kept photocopies of everything that he had in an attic, in case the situation was exposed at some time.

Eventually, an ignominious report was produced on the WDA's conduct, which led to resignations. The board had deliberately conspired to conceal what was happening. We subsequently discovered that the only person who seemed to know about it at this end was the then Secretary of State. In our National Audit Office report, we made a recommendation that there should be protection for whistleblowers when the national interest would benefit from their actions.

It was a paradox for someone who is anti-devolution, such as myself, that there were two exposures at the WDA—another one followed—and the Development Board for Rural Wales was also in the queue. So we had a neurosis about quangos in Wales, which led to the
 
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clinching argument in the devolution debate: "We will have a bonfire of the quangos." The debate was won by only a quarter of 1 per cent., and without the bonfire argument, it would not have been won. I would have been happy if it had not been, but that is another point. I would suggest that the new body, as part of its first inquiry, should ask, "How did we lose the bonfire of the quangos? Where in the system did it disappear?"

I welcome the opportunities that will be created by the evolution of separate auditing bodies for Scotland, England, Wales and Northern Ireland. Each, in its own devolved way, will be experimenting individually with methods, approaches and structures. This will give us the opportunity to spend much more time carrying out comparative studies of the ways in which the benefits or disadvantages of different methods emerge in the various parts of the United Kingdom—I have asked the National Audit Office, through the forum of auditors, to consider this—so that we can all learn from best practice. In the case of Wales, for example, I think that most Welsh Members would agree that an area that requires such attention is the delivery of the health service. I am glad that I wrote to the NAO and asked for a comparative examination of the facilities, waiting lists and so on for hip, knee and cataract operations in Wales, England and Scotland. I believe that such a report is relatively imminent and may be available in the summer.

I welcome this Bill, it enhances the auditing facilities, and I wish the new organisation well.

2.30 pm

Hywel Williams (Caernarfon) (PC): It is a pleasure to follow the right hon. Member for Swansea, West (Mr. Williams) and to hear his positive comments on the setting up of this body in Wales. We cannot claim him as a convert, as he has said explicitly, but it is pleasing to hear his comments, including his pertinent point about quangos. If he is looking for the ashes of the bonfire of the quangos, or perhaps even for some action, he should question not the Assembly, but his friends down there who are in charge. In some ways, it is not an Assembly matter, although it has joint responsibility, and has in the past acted more corporately than it does now.

On behalf of Plaid Cymru, I join the general welcome for this Bill, which confers new functions on the Auditor General for Wales in setting up this powerful new body for audit. We hope sincerely that its effects will be apparent very quickly. We hope that it will lead to much greater scrutiny, accountability and transparency in relation to public expenditure in Wales, all of which will be very welcome. We agree that a single public audit body for Wales headed by the Auditor General is most desirable, given the current arrangement in Cardiff and the duplication.

Some hon. Members might recall the slightly jocular tone that I adopted when I made a speech on this matter in the Welsh Grand Committee—[Interruption.] It was a thin house. I said:

"The word 'auditing' does not conventionally gladden the heart or excite the nerves . . . it is hardly likely that anyone's famous last words would contain the immortal line, 'I wish I had done a bit more auditing'."—[Official Report, Welsh Grand Committee, 15 July 2003; c. 7.]

We would do well, however, to note and praise the value of the work done by the Audit Committee of the
 
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National Assembly. My impression is that it has worked well, and without some of the pyrotechnics that we have seen in other aspects of the Assembly's operations. It has worked well jointly with all the parties that have been involved, and it has worked hard and to a purpose. It has adopted a practical approach.

The complaint is sometimes heard in the less enlightened parts of the press, especially in north and west Wales, "What has the Assembly done for us?" If we consider the work of the Audit Committee, it claims to have saved at least £90 million out of a budget of £10 billion to £12 billion, depending on which year one counts. That might not seem much, but £90 million is a great deal of money, which, I am sure, has been very well used.

The hon. Member for Clwyd, West (Gareth Thomas) made the point in the Welsh Grand Committee, which was also raised earlier, that the regulatory impact assessment put the cost of the move at £500,000, but we understand that that figure has increased. I would be grateful if the Under-Secretary could say what the future cost is likely to be, if he is in a position to do so. That would be a matter of interest to Members of the House and to the public in general in Wales. The proper audit of public expenditure is such an important aspect of securing the public good that we should know what it costs, and what the regulatory costs are. Certainly, we should be clearer about the amount of money that has been saved. With due respect to the Under-Secretary, the Secretary of State and previous Secretaries of State, I would venture that the savings that have been achieved since the establishment of the Assembly might not have been achieved under the pre-Assembly arrangements. Judging on the past record, therefore, this Bill promises much. We will look for reports of positive results in the future.

As the Under-Secretary and other Members have said, this Bill has been the subject of a great deal of scrutiny. Irrespective of the debates and discussions in Cardiff, the Welsh Affairs Committee and Welsh Grand Committee have also considered the matter. Of course, it has also been the subject of the usual procedures in the passage of Bills through the other place. On behalf of Plaid Cymru, I hope that it will now proceed quickly to Committee, and that it will be examined in the proper amount of detail. We will be looking to make a positive contribution to that process.

Members have already referred to a number of improvements achieved in the other place. Plaid Cymru Members were very pleased to note the Government's change of heart on clause 54. I am glad that the Government saw sense, or at least realised that their approach, and that of the Wales Local Government Association, was inconsistent with the principles of freedom of information, and was thus unsustainable. We will be looking to make sure that the Government keep their word.

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