Preparation

Orders of the Day — Government Resources and Accounts Bill – in the House of Commons at 5:45 am on 29th February 2000.

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'() Accounts prepared under this section may include information referring wholly or partly to activities which—

  1. (a) are not activities of bodies falling within subsection (1), but
  2. (b) appear to the Treasury to be activities of a public nature.'.

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

With this, it will be convenient to discuss the following: Government amendment No. 23.

Amendment No. 6, in clause 10, page 5, line 19, leave out subsection (2)(d) and insert—

'(d) publish the information.'. Amendment No. 7, in page 5, line 26, leave out subsection (3)(c) and insert—

(c) publish the information.'. Government amendments Nos. 24 and 34.

Photo of Stephen Timms Stephen Timms The Financial Secretary to the Treasury

In the newly harmonious environment that we are enjoying, I can say that clause 9 governs the scope and content of whole of Government accounts. At the moment, the clause defines the scope of the accounts in terms of the bodies to be included. Accordingly, all items included in each body's own accounts would be included within whole of Government accounts.

There are, however, a number of areas of the Government's finances which are dealt with through separate funds, such as the national insurance fund and the social fund. Although specific Departments have responsibility for administering those funds, they are legally separate and so are accounted for separately. We would want to include such funds within whole of Government accounts. Unfortunately, they would not qualify as "bodies" under clause 9(1), and so at present could not be included within whole of Government accounts. The amendment addresses that issue.

Amendment No. 23 is purely technical. Amendment No. 24 introduces an important performance incentive into the consolidation process, allowing an individual official within each designated body to be given responsibility for preparing that body's consolidation pack, arranging for it to be audited and submitting it as directed.

On amendment No. 34, clause 27(3) is a transitional provision to allow the Treasury to collect consolidation information on a pilot basis from public sector bodies which will ultimately be within the scope of full public sector whole of Government accounts, but are outside the scope of the initial audited accounts for central Government.

The amendment extends the provision to allow the Treasury to require another Department to pilot the necessary consolidation procedures for public corporations or local authorities, to prepare for the extension of the scope of whole of Government accounts from central Government to the entire public sector.

I hope that the House will not accept amendments Nos. 6 and 7, as they would severely impair the efficiency of the consolidation process put in place by clause 10. They would remove the Treasury's right to require electronic data submission and to set deadlines for that, which would be a retrograde step.

Amendment No. 6 would also impose a requirement to publish consolidation pack information for a particular year, which would essentially duplicate information that the body is already required to publish in its annual accounts. That would result in unnecessary duplication and expense. I hope that the House will reject those amendments if the Opposition choose to press them to a Division.

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

I do not agree with much that the Financial Secretary has just said, but I would not want our exchange to be considered disharmonious. Despite the fact that we have had some arguments, our proceedings over a prolonged period have on the whole been harmonious. I do not intend to disrupt that trend.

I have no deep principled objection to amendment No. 22, or at least, I do not think that I have, but I have a difficulty: I do not understand it. Although I listened attentively to the Financial Secretary's remarks, they did not explain it either.

The problem is caused by subsection (b), which refers to activities which appear to the Treasury to be activities of a public nature. That takes us to the heart of the problem that we were discussing in the context of new clause 1. What is an activity of a public nature? What are the criteria against which the Treasury will judge whether the activity is of a public nature? Why are we dealing not with whether it is an activity of a public nature, but with whether it appears to the Treasury to be an activity of a public nature?

I admit that, throughout the Bill, as we have remarked on various occasions, more or less everything is left to the discretion of the Treasury. The amendment could simply reflect the exuberance of the draftsman. He got so used to describing everything as a matter of discretion that even reality began to be a matter of discretion, and we move from reality to appearance. That is a possible explanation, but, if it is not an exuberance of drafting, we want to know why the distinction is drawn between activities of a public nature and those which appear to the Treasury in that light.

The more important question is the first part. What are activities of a public nature? If the Financial Secretary had not also been present for many hours in these proceedings and in the earlier Standing Committee, he might be tempted to say that it was obvious to the meanest intellect what an activity of a public nature was.

However, we have discovered that the company set up by the Bill to engage in unknown activities at an unknown cost and to participate on an unknown basis in unknown numbers of PPP projects does not appear to the Treasury to be an activity of a public nature, despite the fact that it will have £400 million of public funds, plus something unknown under subsection (1)(a). If it were an activity of a public nature, presumably it would be caught. We were told earlier that it would not be caught; it will be outwith the scrutiny of the CAG because it is a company.

6.15 am

The Government have specifically excluded various matters from the purview of the CAG by not accepting the reversal of the burden of proof, which my right hon. Friend the Member for Haltemprice and Howden proposed in a new clause. If I remember correctly, those matters were excluded because they did not appear to the Treasury to be of a sufficiently public nature. We were told that while some activities might receive public funding, they were somehow outside the public sector and that made them appear to the Treasury as activities that were not of a public nature. I am in a state of confusion and muddle about what constitutes an activity of a public nature. I suspect that the Financial Secretary is in the same state.

Part of the reason for the confusion is that the phrase "activities of a public nature" is as vague a phrase as the parliamentary draftsmen could have devised under perplexing circumstances. "Public sector activities" is the usual phrase, but the amendment avoids that. We are therefore considering a much wider concept.

Let us consider the student loans company. Does its work constitute "activities of a public nature"? It clearly uses public money, but it is not a public sector entity. Is it intended to be covered by the definition? I do not know, and I wonder whether the Financial Secretary knows. If he does, it would be useful if he could tell us. If he does not, perhaps he could reconsider the phrase. While he does that, he should consider other similar matters that we raised in Committee and try to tidy up the Bill so that we know what the extremely confusing measure covers.

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

The Deputy Chief Whip says thank you from a sedentary position. However, I fear that he may not thank me because I must progress to amendments Nos. 6 and 7, which we tabled. The Financial Secretary made a reasoned case for not accepting the gist of those amendments, which deal with publishing the information. He said that it would cost too much. That reminds us of Ministers' frequent resort to the doctrine that they cannot answer a parliamentary question because it would cost too much to find the information. It is remarkable that the Financial Secretary should use that argument in this context.

We are considering a case whereby the Treasury has prepared a set of accounts, which constitute whole of Government accounts. They are the crowning achievement of the resource accounting process. Clause 9 covers that and clause 10 refers to it. Clause 10 states: Where the Treasury intend the accounts under section 9 … to relate … to a particular body, the Treasury may … designate that body. When a body is designated, the information is to be delivered to the Treasury. That is a remarkable matter to put in statute. If we are simply considering an administrative internal action of the Treasury vis-a-vis other Departments, why have Ministers troubled the House with a request for a statute basis? The Treasury has discretion to insist on anything being delivered to it at any time of day or night.

A statute is reasonable only if the information is available to the public and especially to Parliament. That will happen if the information is required to be published. Amendments Nos. 6 and 7 would require that. The Financial Secretary will have to provide a better argument than claiming that a small cost will be associated with depositing the relevant item in the Library. I have not analysed how much it would cost to get a piece of paper photocopied in the Treasury, brought across by a messenger and deposited in the Library. However, I doubt whether it would make a major dent in the fiscal balance of our prudent Chancellor. I imagine that it would cost around £2. The cost argument is a non-starter. We are considering the serious matter of parliamentary accountability.

Photo of Julian Lewis Julian Lewis Conservative, New Forest East

Can my hon. Friend conceive of a way in which the information could be provided to the Treasury as set out in the subsections that the amendments would delete, but could not immediately be copied—in whatever form the Treasury stipulated—and handed over for public purposes to the House of Commons? How can the Government make such a distinction? It is hard to conceive of a way in which the existing clause could not be adapted to fit the amendments.

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

While I entirely agree with the gist of what my hon. Friend says, I suppose that the idea is that, dulled by late nights and the insensibility of poor memory, we shall have forgotten by the time these things are being done that they are being done and will not ask for the information in parliamentary questions; or, if we ask, we shall be told, according to the Financial Secretary's arguments, that it is a bit expensive to produce, so we shall never get it.

What we are facing, therefore, is a Treasury that would like to be well informed about all of the Government's activities, but would like to make sure that we are not. That is not a satisfactory position. It is not even a defensible one. I am astonished that the Financial Secretary has sought to defend it. I had genuinely thought that we were dealing here with a drafting omission. I beg the Financial Secretary to look at this again, and ask himself whether as a matter of fact publishing the information is not in this case the absolutely evident requirement under any rational interpretation of the purposes of the Bill.

Photo of Stephen Timms Stephen Timms The Financial Secretary to the Treasury

The hon. Gentleman asked me what amendment No. 22 meant. The key is that clause 9(1) refers to a group of bodies … which appears to the Treasury … to exercise functions of a public nature. The point about appearing to the Treasury to exercise functions of a public nature is already in the Bill. What the amendment does is to extend that to include the words: information referring wholly or partly to activities which. What that allows us to do—which the hon. Gentleman would wish as much as I do, I think—is to include things like the social fund and the national insurance fund, which are not bodies—the existing term used in the clause—but which are covered by information referring wholly or partly to activities which are of a public nature. That is the extension that the amendment makes. I am not surprised that it is not immediately self-evident.

I assure the hon. Gentleman that nobody on the Government Benches is dulled. He said a few moments ago that we might be dulled, but that is certainly not the case.

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

The hon. Gentleman's exegesis of amendment No. 22 is very helpful. Could he just add whether it would also enable the Treasury to include things like trading funds within the scope of the Bill?

Photo of Stephen Timms Stephen Timms The Financial Secretary to the Treasury

I think that some trading funds would already be included under the existing wording.

Amendments Nos. 6 and 7 are to clause 10, whose aim is to allow us to get designated bodies to prepare and have audited consolidation packs-in the same way as subsidiaries of a commercial group prepare them. Those packs facilitate the consolidation process by gathering together accounts information in a standardised format.

Amendment No. 6, in respect of the consolidation pack for the whole year, would impose an additional requirement on bodies within the scope of whole of Government accounts to publish information that would essentially duplicate the contents of the annual accounts that they already have to publish. It would add an additional and unnecessary requirement that people do again something that they already do.

The two amendments together would also undermine the proposed consolidation process by removing the Treasury's rights to require the electronic submission of data and to set a deadline for those data to be submitted. Clearly, we want as much of the process as possible to be electronic. The amendments would damage the ability to achieve that.

Amendment agreed to.