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Lord Hunt of Kings Heath: My Lords, I agree with my noble friend. Primary care trusts will be helped by the enhanced arrangements for public and patient involvement in decisions at the local level through the creation of patients forums. As regards information about good practice, we are committed to a large programme of dissemination of such information. Primary care trusts will be fully a part of that programme.

Baroness Gardner of Parkes: My Lords, is the Minister aware—

Lord Taverne: My Lords—

Baroness Gardner of Parkes: My Lords, the Liberal Democrats have asked one question; we have not. Is the Minister aware that every reorganisation involves some redundancies because people find themselves in positions for which they are no longer suitable? When the GPs changed to primary trusts, a good deal of expense was involved in meeting redundancy costs. Who will be responsible for meeting these costs if the same situation arises? Has this part of the operation been adequately funded?

Lord Hunt of Kings Heath: My Lords, we have made available more than £60 million to support the establishment of primary care trusts. Responsibility for staff redundancies will be transferred to the relevant authority. That is no different from any other reorganisation. Since we came into office in 1997 we have made great strides towards reducing the amount of money spent on bureaucracy—but not, I hasten to add, at the expense of investing in high quality management. I draw a distinction between the two.

Lord Taverne: My Lords, I declare an interest as chairman of a trust concerned with the treatment of

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drug addicts. Is the Minister aware that the transfer of funding to primary care trusts has caused chaos in the payments to many charities, which is causing extreme financial embarrassment to some. These charities are very much concerned in dealing with one of our most pressing social problems. Will the Minister look at this issue?

Lord Hunt of Kings Heath: My Lords, I am sorry to hear that. I shall be very happy to investigate. I am very keen to see stability in the funding and support by the health service of voluntary organisations in order that they may know what is likely to be their funding, not only for a year ahead but for a longer period. That is entirely consistent with the long-term spending review for the health service that we have already announced.

Baroness Finlay of Llandaff: My Lords, I apologise for my untimely and inappropriately early intervention. Have those in primary care trusts been adequately trained to fulfil their function of ensuring equity in the monitoring of uniformly high standards, especially in relation to the care and protection of children and the care of the vulnerable and elderly?

Lord Hunt of Kings Heath: My Lords, the answer is yes. While ensuring that there is a uniform provision of service throughout the NHS, we must also ensure that primary care trusts have sufficient flexibility to make their own decisions in the light of local circumstances.

Accounting Standards

3.24 p.m.

Lord Boardman asked Her Majesty's Government:

    What are their proposals for ensuring that there is transparency in United Kingdom company accounts.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, the Government believe that the UK's accounting standards already provide for a high degree of transparency in company accounts, although in a world of increasingly complex transactions we must not be complacent.

A number of measures are in hand to build on the existing position. These include the recommendations of the company law review, the move to international accounting standards and the group chaired by DTI and Treasury Ministers which was formed in February to co-ordinate the response of key regulators to issues of accounting, auditing and aspects of corporate governance raised in the aftermath of Enron. This group will produce an interim report by the end of July.

Lord Boardman: My Lords, I thank the Minister for that Answer. Does he not regret that the Government set a bad example by keeping billions of pounds of borrowing off their balance sheet? As to company law, the subject of my Question, does he consider that

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chairmen of companies should be required to take a greater responsibility—and perhaps a personal responsibility—for the fairness of the accounts. After all, chairmen recommend to shareholders the accountants they wish to appoint. They also appoint senior executives, some of whom, no doubt, will be aware of any imperfections in the accounts. These matters require considerable consideration.

Lord Sainsbury of Turville: My Lords, these are exactly the kind of complicated questions the group is looking at and on which it is co-ordinating various expert views.

Lord Bruce of Donington: My Lords, will the Minister give the House an assurance that those firms which may be involved in the inquiries he envisages do not themselves suffer from the very defects about which he is complaining?

Lord Sainsbury of Turville: My Lords, the work we are doing at the moment involves co-ordinating the expert advice of various bodies. I do not think the particular issues we are talking about in terms of accounting standards apply to those bodies, which are, by and large, statutory bodies involved in controlling and regulating the profession.

Lord Oakeshott of Seagrove Bay: My Lords, does the Minister accept that company accounts in this country generally present a truer and fairer view than those in the United States—not because British businessmen and accountants are straighter than their American counterparts but because we learnt the lessons of our own Enrons and WorldComs five or 10 years ago? They were called Barings, BCCI and, above all, Maxwell.

Lord Sainsbury of Turville: My Lords, that is probably a fair judgment. I do not believe that you can make a comparison. In this instance, we had both problems and solutions, in some cases, earlier on. Of course, as has been pointed out, the basis of accounting is in some critical ways different. The American system has some very specific rules whereas the British system is principle-based and auditors have to give a view as to whether there is a true and fair account of the economic situation.

Lord Barnett: My Lords, does my noble friend accept that what has happened with accounting practices, in America and elsewhere, is too serious for party political exchanges? It could happen here. I am glad that my noble friend is not complacent, but does he accept that it is less a matter for government intervention than for intervention by the major financial institutions, which select the non-executive directors who sit on the audit committees of major companies in the UK? If he is going to do anything at all, will my noble friend intervene by telling these major financial institutions—which may in practice

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control most of the FTSE 100 companies—that they should intervene more frequently to ensure that the non-executive directors are doing the right job?

Lord Sainsbury of Turville: My Lords, I have a good deal of sympathy for that view. However good the rules, unless there are people in the company who independently will enforce those rules and insist that the right things are done, many of the rules will be a complete waste of time. My noble friend is right to point out that the financial institutions which control many of the shares are undoubtedly in the best position to ensure that the non-executives fulfil their responsibilities properly.

Lord Saatchi: My Lords, the noble Lord, Lord Barnett, is right when he says that public accounts are too important to be dealt with in a party political way. Is it not true that the Government do exactly that? This Government call spending "investment"; call benefits "credits"; and call tax "insurance". By using those accounting practices, the Government massaged down the politically sensitive figure for the UK tax burden—and would still be doing that today if they had not been stopped by the Office for National Statistics. Is that not the reason for the Chief Adviser to the Treasury—the Government's own adviser—writing this comment? I quote:


    "Reader understanding of financial reports in the public sector is sometimes felt by those who compile them to be a disadvantage".

Lord Sainsbury of Turville: My Lords, the question put by the noble Lord, Lord Boardman, was specifically about UK company accounts. I appreciate that the noble Lord, Lord Saatchi, always wants to make his little speech about deficiencies that he sees in the public accounts but the original Question was about company accounts.

Procedure of the House: Select Committee Report

3 p.m.

The Chairman of Committees (Lord Tordoff): My Lords, I beg to move the first Motion standing in my name on the Order Paper.

There has been considerable worry about late Written Answers, which has been taken seriously by the committee. At the end of the day, there is not much that we can do if departments refuse to answer. We suggest that there may be a way around some of the confusion, where there has been a certain amount of pass-the-parcel from department to department. We hope that the system that is being implemented will be of some assistance.

The comments on appellations simply repeat what is in the Companion. If I may say so, the habits of the House have been in decline for some time and that section of the report is an attempt by the committee to

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get people back into line. I do wish that Members would stop referring to "the noble Minister" when they should refer to "the noble Lord the Minister".

Moved, That the third report from the Select Committee be agreed to (HL Paper 137).—(The Chairman of Committees.)


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