Part of 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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Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset 5:45 am, 29th February 2000

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.