Mr Don Touhig (Parliamentary Under-Secretary (Wales), Department for Constitutional Affairs; Islwyn, Labour/Co-operative)

I beg to move amendment No. 50, in page 35, line 25, leave out '145B or'.

Mr Win Griffiths (Bridgend, Labour)

With this it will be convenient to discuss Government amendment No. 51.

Mr Don Touhig (Parliamentary Under-Secretary (Wales), Department for Constitutional Affairs; Islwyn, Labour/Co-operative)

Due to the discussions that we have had right from the beginning of consideration—through pre-legislative scrutiny to Second Reading—I have no doubt that clause 54 is the part of the Bill that will exercise a great deal of interest. What the Government seek to do through the amendments might help to assuage some fears that have been expressed about the clause's ability to prevent disclosure of information.

The Government have worked to achieve consistency in the treatment of section 49 of the Audit Commission Act 1998 and clause 54. The clause will apply the restriction on disclosure of information to value-for-money studies undertaken at the request of education bodies under proposed new section 145B of the Government of Wales Act 1998, which we touched on earlier. Studies in respect of such education bodies are not covered by section 49 of the Audit Commission Act and the amendments will bring the provisions into line. As the studies are at a body's request, the release of information will be governed by the normal laws of confidentiality and the terms of the agreement between the parties.

Mr Bill Wiggin (Shadow Secretary of State for Wales, Local and Devolved Government Affairs; Leominster, Conservative)

I rushed off to get the Government of Wales Act 1998, but I could not find section 145B. I can find section 45(6)(b), but that does not fit with the line of argument. When was the Act amended and what is the correct wording?

Mr Don Touhig (Parliamentary Under-Secretary (Wales), Department for Constitutional Affairs; Islwyn, Labour/Co-operative)

I think the hon. Gentleman is confused because section 145B is a proposed new section to be inserted by the Bill in the Government of Wales Act. That is why it is not there yet.

Mr Win Griffiths (Bridgend, Labour)

I think everybody is happy now.

Amendment agreed to.

Amendment made: No. 51, in clause 54, page 35, line 39, leave out '145B(3) or'.—[Mr. Touhig.]

Question proposed, That the clause, as amended, stand part of the Bill.

Mr Bill Wiggin (Shadow Secretary of State for Wales, Local and Devolved Government Affairs; Leominster, Conservative)

This is the most contentious part of the Bill. We call for the deletion of the clause as it restricts the disclosure of information and issues criminal sanctions for non-compliance. As I said on Second Reading, we are aware that the Government are unhappy with the clause and have gone some way to amend it, but such amendments and assurances have not gone far enough to ensure the protection of whistleblowers, who should not feel intimidated and unsafe in a free society.

In expecting us to trust them that clause 54 will be amended once section 49 of the Audit Commission Act is amended in line with the Freedom of Information Act 2000, the Government must believe that we would

never expect them to make a U-turn. However, they know as well as we do that that is by no means a certainty. I am surprised that the Liberal Democrats think it acceptable to agree to such a controversial and worrying clause on the Government's word. Discussing clause 54 on Second Reading, the hon. Member for Montgomeryshire (Lembit Öpik) said:

''I am optimistic about the Government's willingness to alter that . . . I trust them on the matter and can envisage no reason why they would renege on something for which they have accepted the arguments''. —[Official Report, 17 June 2004; Vol. 422, c. 943.]

I am surprised and disappointed that the Liberal Democrats have given up on this clause so easily, and I am sure that whistleblowers throughout Wales and those who believe in a free society will be too. The Conservatives, however, will maintain pressure on the Government to delete it because we need to know how the Audit Commission Act and then the clause will be amended before this Bill is enacted.

The conduct of locally elected authorities must be transparent and totally above board. The restriction of disclosure in the clause implies that a body with something to hide must be protected from the public. We maintain that it is wrong in principle to apply criminal sanctions for the disclosure of information. I am concerned that the provision for criminal sanctions will deter whistleblowers from disclosing information on issues other than those exceptions in subsection (2) on local government audit for fear of being treated more harshly than for disclosure relating to any other public sector audit.

Will the Minister tell the Committee under what circumstances the Government consider criminal sanctions appropriate for the disclosure of information? On Report in the other place, Lord Evans of Temple Guiting said that

''the Government are worried about the clause and wish to solve the problem. As I described, the only way to solve it is to place before both Houses towards the end of the year an order that gives us, we hope, the result that I suspect that we all want.''—[Official Report, House of Lords, 1 April 2004; Vol. 659, c. 1480.]

What is the end result that the Government want? If it is that there is no restriction on the disclosure of information relating to local government audit, they must amend both the Freedom of Information Act and section 49 of the Audit Commission Act before this Bill is put on the statute book. Otherwise, they must agree to delete clause 54. If they placed a bar on the clause being brought into force, that would at least prevent the anomaly of there being, for a short time, different law on the statute book, as the amendments would not have been accepted.

Will the Minister tell us whether there is a precedent for a Bill being passed on a promise that it will be amended once on the statute book? As it stands, we cannot leave this unacceptable clause in the Bill on such a promise. We need certainties about potential changes, which I hope he will give us. If not, the clause should not stand part of the Bill.

Mr Hywel Williams (Spokesperson (Disability; Health; Social Security; Work and Pensions); Caernarfon, Plaid Cymru)

In another place, on behalf Plaid Cymru, Lord Elis-Thomas noted the anxiety that has been expressed about the clause and its potential impact. I have taken heed of the Minister's assurances given on Second Reading and I am sure that he will tell

us today that there is a strong probability that the Government will act in the way he described. The clause would act as a disincentive for whistleblowers, so I am interested in what he has to say now.

Mr Roger Williams (Shadow Minister (Rural Affairs), Environment, Food & Rural Affairs; Brecon & Radnorshire, Liberal Democrat)

We, too, have great concerns about clause 54, and my hon. Friend the Member for Montgomeryshire has asked the Government for greater assurance that their amendments will protect whistleblowers. We are not yet convinced that their amendments will protect whistleblowers to the extent that we want.

Mr Don Touhig (Parliamentary Under-Secretary (Wales), Department for Constitutional Affairs; Islwyn, Labour/Co-operative)

I am conscious that clause 54 has been the most contentious part of the Bill since pre-legislative scrutiny and our giving of evidence to the Welsh Affairs Committee, when it was clause 50 in the draft Bill.

Hon. Members will know that I do not want to be partisan in any way, and I take no personal issue with the hon. Member for Leominster, but I find it difficult to understand the Conservatives. When, as a Back Bencher, I introduced a Bill to protect whistleblowers, the hon. Gentleman's party and Government did everything they could to wreck it and succeeded, but now they are the whistleblower's friend. However, like St. Paul on the road to Damascus, a conversion will benefit us all, and we welcome the hon. Gentleman's conversion to protecting the interests of whistleblowers.

Clause 54 restricts the disclosure of information obtained during a local government audit or study by an auditor or the Auditor General, albeit with widely cast exceptions. Clause 54 is an equivalent provision to section 49 of the Audit Commission Act. Hon. Members may remember that on Second Reading I referred to clause 54(2), which lists a number of exceptions to restrictions on disclosing information, and I have written to a number of right hon. and hon. Members on the matter in recent months. The exceptions in the Bill that permit disclosure cover matters relating to best value, fraud, the work of the ombudsman, the discharge of social service functions—an important issue that caused recent media interest—education, best value, social landlords and crime.

The Welsh Affairs Committee, the National Assembly for Wales and the Auditor General recommended that the clause should be deleted, but the Audit Commission and the Welsh Local Government Association argued for it to be retained because it provides a safeguard against the inappropriate or premature release of information.

As I said on Second Reading, I fully understand that there should be no impediment to the legitimate disclosure of information. The Freedom of Information Act is clear evidence of the Government's commitment to that cause. As we debated this morning, the Government consider that there should not be undue inconsistency between England and Wales in the criminal law on the inappropriate release of information. That would be the case if clause 54

were deleted and section 49 of the Audit Commission Act remained in force—a matter would not be an offence in Wales but would be in England.

The Government have listened to the concerns expressed during pre-legislative scrutiny and by Opposition parties and others in the House and the other place during the Bill's passage, and we have made amendments to clause 54. They will enable the Bill to be amended further after enactment to reflect the outcome of a general review undertaken by the Department for Constitutional Affairs under the Freedom of Information Act of existing statutory bars to the disclosure of information.

The Government have announced their intention to amend section 49 of the Audit Commission Act as a result of the review. I made a ministerial statement to that effect, which was laid before both Houses of Parliament on 24 March. The amendment will overturn the existing presumption in section 49 against disclosure, and change it to one in favour of disclosure, which we all wish to see and is wholly consistent with the spirit of the Freedom of Information Act. The amendment will be made by order before the end of the year. A comparable amendment should then be made to clause 54 once the Bill is enacted. It is not possible to link the two amendments in the order, but they will run parallel, and both seek the same objective.

Freedom of information legislation is complex and it would be inappropriate for me to pre-empt the detailed drafting of the section 75 order that will carry into effect the pledge that I gave on Second Reading and am repeating today. That said, the practical effect of the proposals is that information obtained by the Audit Commission or an auditor during the course of an audit or study, and held by any public authority, could be disclosed by that public authority in the spirit of the Freedom of Information Act. Where the same information is held by any organisation not subject to the Act, it would also be entitled to disclose it subject to a limited number of exceptions. At present, such information is subject to an absolute exemption from disclosure under the Act.

A person or body would be able to make a formal request to any public authority for information under the provisions of the Freedom of Information Act. The presumption in favour of permitting disclosure by a public authority or its staff would not be limited to formal requests for information under the Act. Section 75 orders allow for ancillary provisions and it is proposed that the amendment to section 49 would also cover the voluntary release of such information—proactive disclosure—not related to formal requests, provided it was not inappropriate.

On Second Reading, I undertook to give right hon. and hon. Members any additional information I could on work being undertaken to amend the clause. I can now reveal to the Committee that the Government have agreed to drop the imprisonment sanction from section 49 of the Audit Commission Act. That also means that it can be deleted from clause 54 once the

Bill is enacted. I cannot give firm details as to when that will be done because the Government need to give further consideration to the matter, but it will be at the earliest opportunity. We all feel that if we change the presumption of the clause from being against to in favour of disclosure, it would be inappropriate to have the same degree of sanction for any breach—perhaps a fine might be more appropriate.

It is not entirely clear whether our intention can be accomplished through the section 75 order. However, I hope that that demonstrates the Government's determination to make clause 54 as open and proportionate as possible, but in a structured way. It has been said that much has been taken on trust in respect of future amendments to the clause. However, the record of our proceedings in this and previous debates will be there for all to see and I would not give undertakings if the Government were not committed to taking the matter forward, as I explained.

Several points were made in our brief debate. The hon. Gentleman said that clause 54 is dangerous for whistleblowers; as I said on Second Reading, the Auditor General is a prescribed person for the purposes of the Public Interest Disclosure Act 1998, which was based on a Bill that I introduced, which was thwarted by the Conservatives when they were in office. Genuinely concerned whistleblowers can make information available to the Auditor General without breaching anything in clause 54, which promotes only the disclosure of information obtained by the Auditor General or an auditor. A local government whistleblower could disclose other information in his or her possession related to the finances of the authority without breaching the clause.

The hon. Member for Leominster asked whether there was a precedent for a Bill being passed on the premise that it will be amended. I am not sure whether there is such a precedent; the Government are not afraid to seek innovative solutions to problems, and I believe that the solution that we propose will satisfy everyone if it can proceed as the Government have pledged that it will.

I hope that the fears of hon. Members on both sides of the Committee will be assuaged with those few remarks. The Government are determined to make the appropriate amendments.

The hon. Gentleman was concerned about the Bill being enacted, and the amendments to section 75 orders not being made. I remind him of a point that I made on Second Reading: clause 22 deals with immediate and other reports of a public interest. Clause 22(1) states:

''In auditing accounts of a body under this Chapter, an auditor must consider whether, in the public interest, he should make a report on any matter which comes to his notice in the course of the audit, in order for it to be—

(a) considered by the body, or

(b) brought to the attention of the public.''

Subsection (3) makes the position clear. It states:

''If the auditor considers that the public interest requires the matter to be made the subject of an immediate report, he must make the report immediately.''

Having said all that about the ''sanctions'' in clause 54 until it is amended, there is still the fall-back position that if an auditor believes that there is a matter to be made public in the public interest, he or she has the power to make that information available. I hope that hon. Members' fears have been assuaged. I am asking the House of Commons to take the Government on trust, but I would not have said what I did if we were not determined to implement the proposals.

Mr Bill Wiggin (Shadow Secretary of State for Wales, Local and Devolved Government Affairs; Leominster, Conservative)

I am grateful to the Minister for what he said, especially about removing imprisonment from the list of sanctions. I am aware that he is the whistleblowers' friend from his history. As I understand it, he said that his intention to drop the imprisonment sanction may not be possible to carry out under a section 75 order. I accept that the Minister has set himself quite a challenge, but he has the opportunity before Third Reading to ensure that the Committee knows whether it will be possible for him to do what he said he would. Therefore it is not appropriate for us to press the amendment to a Division. What the Government have done is extremely constructive; I recognise that they also want transparency and clarity in the Bill. I am grateful that we have made some progress today. The idea that the Liberal Democrats were quite so compliant came from the following remark by the hon. Member for Montgomeryshire (Lembit Öpik) on Second Reading:

''Perhaps I am simply an optimist or willing to trust the Minister because he has an honest face''.——[Official Report, 17 June 2004; Vol. 422, c. 943.]

We should trust the Minister because he repeatedly said that he would do something, rather than because of the honesty of his face. We should wait and see whether it can be done. It would be of great comfort to the Committee if the Minister could write to us about the section 75 orders.

Mr Don Touhig (Parliamentary Under-Secretary (Wales), Department for Constitutional Affairs; Islwyn, Labour/Co-operative)

If it helps the hon. Gentleman and other hon. Members, I said on Second Reading that if I had any further information when we reached consideration in Committee, I would reveal it. I have kept that promise: I have been able to reveal that the Government are considering the removal of the prison sanction for any breach of the clause. By Report, or Third Reading, if I have further information on how we will take this forward—with or without a section 75 order—I will ensure that hon. Members are made aware of it.

Mr Bill Wiggin (Shadow Secretary of State for Wales, Local and Devolved Government Affairs; Leominster, Conservative)

I am grateful to the Minister for his reply, and do not want him to row back from what he has already said today. It is fair to say that there is a question mark over how the Government will proceed. It is important, while we scrutinise the Bill, that we do our best to nail down what will happen. I know that the Minister will provide us with that information if he can, but I want to put the marker down that we will need that information if we are to support the Bill. Otherwise, we will be faced with the extraordinary situation in which, for a period of time, the rules in Wales will be different from the way that the Government want them to be. When the amendments to the other pieces of legislation then go through—

again, the Committee has not seen how those amendments will be worded—there will be a complete change in the nature of the Bill. It is therefore important that we get as much information as we can. I know that the Minister is doing everything that he can, and I am grateful for that. I hope that he will continue to keep us fully informed on the mechanics of the matter.

Mr Don Touhig (Parliamentary Under-Secretary (Wales), Department for Constitutional Affairs; Islwyn, Labour/Co-operative)

It is not intended that the Bill—assuming that Parliament approves it—should be enacted until 2005. I am not being complacent about the amount of time left, but we hope to have sufficient time to introduce the amendments that I suggested.

Question put and agreed to.

Clause 54, as amended, ordered to stand part of the Bill.

Clause 55 ordered to stand part of the Bill.