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10.39 pm

Greg Clark (Tunbridge Wells) (Con): At this stage of the debate, everything that ought to be said has been said, but not everybody has said it. I shall therefore follow suit and praise the chairmanship of my hon. Friend the Member for Gainsborough (Mr. Leigh). He is an indulgent Chairman to Committee members but a fearsome Chairman in the eyes of witnesses. I remember, with a mixture of horror and admiration, his intervening on one witness, whose answer was full of circumlocution, to tell him that he was speaking drivel and that if he did not do better in the next half hour, he should not go further. It will take me many years to reach that admirable level of intolerance of waffle. I have greatly enjoyed serving under my hon. Friend’s chairmanship.

I pay tribute to the National Audit Office under Sir John Bourn. It, too, chooses its words carefully and I often marvel at the understatement with which it delivers withering judgments. Using the word “disclaim”, which my hon. Friend the Member for South Norfolk (Mr. Bacon) mentioned, is a modest way in which to pronounce a devastating verdict on a set of accounts. Perhaps that serves as a totem for Sir John’s approach. We all know what he means, but he expresses it diplomatically.

May I also put on record my appreciation of the work of the Committee staff and the Treasury representatives, who respond to questions that are often naive, at least on my part, with enthusiasm and helpfulness, which often goes beyond the call of duty? I am grateful for that.

I intended to praise the speech of the hon. Member for Tooting (Mr. Khan), but in the light of his comments, perhaps I should give way so that he can praise his own contribution. However, he always makes a lively contribution in the Committee and he has done that again tonight.

Given the lateness of the hour, I want to comment on only three subjects that we have considered: the BBC; our report on competition, which was directed at the Office of Fair Trading; and the report, which several hon. Members mentioned, on tax credits.

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The Chairman referred to our perennial plea to be given oversight of the BBC, or least to allow the National Audit Office access. I want to reinforce that. I should perhaps declare an interest because I worked for the BBC in a previous existence. One of my duties was being the point man who haggled with the NAO about what went into its report on the World Service, which is the one part of the BBC to which the NAO has unfettered access. I know from that experience that there is no question that the NAO’s scrutiny of that part of the BBC compromised its editorial or political integrity. It was entirely proper that the use of public money be scrutinised in that way. The contention that NAO involvement exposes the BBC to excessive political interference is frankly nonsense.

It is disappointing that the Green Paper, which became a White Paper and is shortly to become a BBC charter, has given way in almost every respect to the BBC’s demands but not to those of Parliament. I do not know what insight that provides into the Government’s thinking, but it is regrettable.

Our report on the BBC had a worthy subject—the expansion of White City—but it is not one of the more central subjects. I hope that, if the NAO has unfettered access, we might consider issues such as the BBC’s investment in digital and online services and its commercial services in our debate next year or the subsequent year. Such matters go to the heart of the appetite for proper public scrutiny of the BBC.

Let me give an example of things going well. The hon. Members for Tooting and for Somerton and Frome (Mr. Heath) said that we should praise and encourage. Our robust hearing on the important subject of the Office of Fair Trading has already had a remarkably salutary effect. Under the Competition Act 1998, the Office of Fair Trading acquired far-reaching new powers, including the power to compel witnesses to give evidence and to fine up to 10 per cent. of turnover. It has also had a huge increase in its staff and budget levels.

When representatives of the OFT appeared before the Committee, however, we found that it had failed to make use of those powers in almost every respect. Inquiries that were meant to take between six months and a year were taking three years to complete. Not one of the standards that the OFT had set itself, as outlined on its website, had been met. Not once had the power to compel witnesses to give evidence been used. The situation was unravelling to such an extent that it gave the impression of being what I described as a meek organisation.

The chief executive of the OFT, John Fingleton, was only six weeks into his term of office when he appeared before the Committee. To his credit, however, he did not do what he might reasonably have been expected to do, and claim that he had not been there at the time. That would perhaps have been understandable, but instead he took our criticisms on the chin and, since that hearing, there has been a remarkable flurry of activity at the OFT. It has launched inquiries into supermarkets, school uniform suppliers and credit services, and there has been a real increase in the pace and relevance of its inquiries. It is too early to say whether all that will be matched by a sustained focus on quality, although I obviously hope that it will be. I commend the OFT’s positive reaction to the NAO
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report and to the rather robust exchanges with all hon. Members on the Committee.

The third subject that I want to talk about is tax credits. Many hon. Members have mentioned this already. Like the hon. Member for Glasgow, South-West (Mr. Davidson), I believe that this is an extremely important area of public policy. I believe that to be the case for two reasons. First, as the hon. Member for Somerton and Frome mentioned, the tax credits policy has caused the report and accounts of the Inland Revenue to be qualified four times in a row. Given that that is the flagship financial Department of the Government, responsible directly to Treasury Ministers, this is a matter of profound concern that should rightly be the concern of the Committee.

Secondly, the new tax credits system cost £16 billion, which is a huge sum that requires proper scrutiny. As the hon. Member for Glasgow, South-West said, the Committee is the only forum in which this amount of Government spending can be scrutinised—dare I say professionally?—without the partisan knockabout that we get here. I should like to place on record my disappointment in the degree of scrutiny of the tax credit system that we have been able to exercise. In the pre-Budget report, the Government changed an important part of the tax credit policy—rightly, so far as one can tell on paper. They increased the disregard for people’s changes in income from £2,500 a year to £25,000 a year. That is a huge increase that will have huge financial consequences. It is therefore important that the Committee should be able properly to interrogate the reasons for that decision, to test whether the change in policy offers value for money, and that is what we tried to do.

Committee members from both sides of the House asked some very relevant questions. Perhaps I should follow the example of the hon. Member for Tooting and praise my own questions, as he did. I asked the questions that were on everyone’s mind. I asked the deputy chairman of Her Majesty’s Revenue and Customs the following question:

in the pre-Budget report—

Mr. Gray replied:

I said:

Mr. Gray said:

I said, “Providing that information?” and Mr. Gray said, “Yes.”

That information has not been provided. In the Committee’s report, the evidence that HMRC submitted said, in complete contrast to what was told to us in the hearing:

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When we discussed our draft report as a Committee, we noticed that the information had not been provided, and we said that if it had been overlooked, we ought to draw attention to it. I know that Labour Members participated in that discussion. We therefore placed in the report recommendation 3, which said:

In the Treasury minute responding to the Committee’s recommendations, as Treasury minutes are required to do, we have yet again an answer that is waffle to the point of being gobbledegook. It says:

That flies in the face of the reasonable evidence that HMRC gave to the Committee.

Just to emphasise the point that this information exists and is not being provided to the Committee, I can tell the House that the Institute for Fiscal Studies, which no one can accuse of being politically partisan, put in a freedom of information request to obtain that information. In a letter refusing to disclose it, HMRC wrote to Mike Brewer of the IFS:

I am very willing to give way to the Financial Secretary if he can give us the Treasury’s calculation of the effect of the increase in the disregard or explain just what is the public interest in withholding from the Public Accounts Committee this crucial piece of evidence that witnesses before the Committee said existed, that they promised to provide to the Committee and that they have admitted to the IFS exists, but have not provided.

We work quite hard as a Committee, meeting twice a week. We take our responsibilities seriously. As the hon. Member for Glasgow, South-West mentioned, for the most part we do not have party politics before our eyes when we are scrutinising Government value for money. We all seriously want to get to grips with the question of tax credits. My view, like that of many Labour Members, is that tax credits have many virtues and it is important to get them right and solve some of the overpayments that cause such distress to many of our constituents. We can judge whether that is the right reform only if the Government provide us with the information to make that assessment.

I hope that the Financial Secretary will reflect on the contributions that have been made and, perhaps, trust the Committee and Parliament a little more to do our job in helping to scrutinise these measures. Even if it proves a little embarrassing for Ministers, the function of the Public Accounts Committee, going back into the mists of time, as the Chairman reported, is sometimes to ask difficult questions. It does not give confidence, and it is not an impressive performance by the Government, if information is withheld, impeding us in our duty.

10.53 pm

Mr. Ian Davidson (Glasgow, South-West) (Lab/Co-op): I begin my remarks with a tribute to the Chairman
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of the Committee. I am often asked by my colleagues and, indeed, by Opposition Members what it is like serving under the hon. Member for Gainsborough (Mr. Leigh). They ask with some trepidation, as though they expect him to behave in a somewhat wild manner. I indicate that indeed he is the very essence of a good Chairman. Despite his views, which when expressed in this Chamber I regard as extreme in the extreme, he has chaired the Committee with impartiality and fairness on all sides. Indeed, he has defended the position of the Committee against assaults from outside. For example, Nicholas Soames, the Member for Prince Charles, has on several occasions berated him for allowing the Committee—

Madam Deputy Speaker (Sylvia Heal): Order. I remind the hon. Gentleman of the custom of the House of referring to other hon. Members not by their names, but by the constituency that they represent.

Mr. Davidson: May I refer to the hon. Gentleman to whom I referred earlier as representing a constituency somewhere in England? I am afraid that I am not aware of his constituency. He gives the impression of seeking to represent a particular individual who, I understand, is not a voter. He regards any inquisition or discussion by the Public Accounts Committee of the financial circumstances of that individual as almost a personal affront. While I anticipate that the Chairman might have some sympathy with that point of view, he has nevertheless defended the Committee’s right to conduct those investigations over a long period, for which we are grateful. Given his encouragement, we will continue to do so.

That is a mark of the political impartiality of the Committee, which has been and continues to be one of our strengths. We meet as a group of partisan politicians in an environment that is almost entirely removed from the cockpit of partisan conflict. There are the occasional Whips’ narks from one side or the other who wish to intrude in our debates in the manner for which they have been wound up. However, the vast majority of members of the Committee spot that right away, and more sensible voices prevail.

Madam Deputy Speaker: Order. The scope of the motion is very wide, so I hope that the hon. Gentleman will now address his remarks to one of the numerous reports listed in it.

Mr. Davidson: Indeed, I will do so in the remaining four hours of my contribution. [Laughter.]

Mr. Bacon: Does the hon. Gentleman recall the maxim of Fidel Castro, that any speech of less than four hours cannot be doing one any good?

Mr. Davidson: Indeed, I was reminded of that when the hon. Gentleman was speaking earlier. Perhaps he did not speak for four hours, but it certainly felt like it.

Madam Deputy Speaker: Order. The Standing Orders of the House and the occupant of the Chair will ensure just how long any hon. Member will speak.

Mr. Davidson: I look forward to reading Hansard tomorrow to check exactly how long the hon.
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Gentleman was speaking for. It may have been for less than four hours, although I did find myself losing the will to live after two and a half.

May I turn to the way in which our debates are conducted? Ever the assiduous member of the Committee, I think that I am the only one who has brought the complete box of reports to the Chamber. Following the hon. Member for Tunbridge Wells (Greg Clark), I am tempted to read the edited highlights of my contributions to the Committee, but I shall refrain from doing so.

One of the values of the Committee is the way in which we are, in many ways, about the only genuine counterbalance to the permanent Government. Often, when issues such as tax credits become the subject of partisan debate, there is a knockabout involving a group of Government or Opposition Members who feel obliged to defend what is being done, even though it is indefensible. Only in a relatively impartial environment are we able to have a genuine interrogation of what is being done in our name by the civil service and bureaucracy.

If people are not entirely convinced that that happens in the United Kingdom, they should have a look at the reports dealing with Northern Ireland, of which I have a number here. They reveal the stultifying effects of permanent government without serious parliamentary challenge. I think we would all accept that, because of the unique circumstances in Northern Ireland, we do not have the degree of scrutiny of the civil service and bureaucracy that would be possible elsewhere.

What has happened in Northern Ireland is not that governance has been improved, but that governance has been allowed to decay and decline. Despite the excellent efforts of the Northern Ireland Audit Office, we see a quality of governance in Northern Ireland that would not be acceptable, if there were reasonable scrutiny, in any of the other three nations that make up the United Kingdom. We have played a particularly valuable role in that regard. I hope that that the standards that we have tried to introduce in Northern Ireland will be maintained by the Assembly once it is re-established.

I want to say something about the relationship between the Committee and the National Audit Office. Undoubtedly, many National Audit Office staff members are cleverer than all the members of the Committee put together, although there are occasions when I wish that they did not draw that to our attention so forcefully. Our role is distinct from theirs, and we must recognise that our action in championing their access, standards and criteria is valuable. We need not be experts in every subject that they investigate; in many instances, it is sufficient for us to put our weight behind their efforts.

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