GOVERNMENT OF WALES BILL (PROGRAMME) (NO. 3)

House of Commons, 18 July 2006.

Government of Wales Bill

Clause 7 — Candidates at general elections

Peter Hain (Labour, Neath)

I assume that the programme motion has been moved, Mr. Deputy Speaker.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Moved and agreed.

Peter Hain (Labour, Neath)

I beg to move, That this House disagrees with the Lords in the said amendment.

I believe that the package of amendments that we present today forms the basis of a cross-party consensus to achieve Royal Assent before the summer. The Government have listened to debates in this House and particularly in the House of Lords, where some major amendments were tabled. We have sought agreement and I believe that we now have that on the composition of Assembly Committees. The d'Hondt formula is now, instead of being up front, very much a fall-back option and on the back burner. It is there if needed, but we hope that it will not be needed. We have also made concessions on the name of the audit committee and, importantly for all Opposition parties and—frankly speaking—for ourselves, on the membership of the Assembly commission.

The debate on the details of the Bill has been had, and I hope that the Conservatives will now join the other parties in Wales to make the new powers work, and not pursue old arguments. I thought that it was very apt of the former Plaid Cymru leader, Dafydd Wigley, to have told the Western Mail yesterday:

"I hope both sides can give and take. To prepare for what happens after next May, it is extremely important that the Bill gets through before the recess."

That is indeed important. There are important preparations to be made for the election and many orders to be laid in respect of the new internal architecture of the Assembly. The Assembly officials and others want to get on with that and, therefore, Royal Assent by next Tuesday is very important.

After that brief introduction, I shall now address the amendments specifically. I realise that the ban on dual candidacy is contentious with all Opposition parties, but it is a manifesto commitment. Our 2005 general election manifesto stated that we would

"prevent candidates from standing on both the list and in a constituency in order to make all candidates genuinely accountable to the electorate and to end Assembly Members being elected via the backdoor even when they have already been rejected by voters."

That is a clear commitment from a manifesto that we took to the country in May last year and on the basis of which we won a resounding victory, certainly in Wales and also in the rest of the country. It is a measure that this House considered at length and supported by a considerable majority earlier this year.

The proposals in clause 7 of the Bill, as originally drafted, will strengthen the integrity of the Assembly's electoral system and the legitimacy of regional Assembly Members. They will put the voters in charge by enabling them to reject a candidate who can currently get in through the back door despite being rejected by the voters in a constituency.

I appreciate that this issue has aroused strong feelings on both sides of the House and concerns have been expressed, but I wish to draw the attention of the House to the views of Lord Elis-Thomas the Presiding Officer of the Assembly since its establishment in 1999 and Plaid Cymru's former parliamentary leader. When asked recently by the BBC about his views on the dual candidacy ban, he said:

"every party has selected under the system which is in the Bill and that, to me, signals a bit of an hypocrisy to carry on fighting old battles, I find that quite boring. So my main battle now is to try and get the structure of the National Assembly under the new constitution and new bill in place for 2007 because I don't want people wasting time, whoever the Government is after 2007, by not being able to get things done."

He added that

"the debate and the arguments have been lost."

That is a significant statement. He continued:

"The politics has been lost. What I'm saying is that the big picture now is to get the Assembly established, and a new constitution, because what we have to do is to make it clear to the people of Wales that we have a new democratic opportunity. That is the most important way to challenge the Labour Party or any other party."

I would be the first to admit that I have not always agreed with the views of Lord Elis-Thomas in the past—and I do not necessarily agree with every word of that quotation— but I believe that on this occasion he was speaking with the best interests of the National Assembly and of Wales at heart. He was speaking in a non-partisan way. I know that he was not a supporter of the ban on dual candidacy, but he has moved on and it is important that the House also moves on.

Albert Owen (Labour, Ynys Môn)

I agree entirely with what the Secretary of State said about the manifesto commitment and the fact that we are talking about something that the House of Commons has passed on numerous occasions. Does he agree that Lord Elis-Thomas is, of course, a member of the House of Lords and that he accepts, and his party accepts, in the House of Lords, that the supremacy remains in this Chamber and in the House of Commons?

Peter Hain (Labour, Neath)

Indeed, although I am not seeking to deny that there have been real improvements to the Bill as a result of debates and arguments in the Lords and the amendments that have been moved there. There has been a constructive exchange, which has partly resulted in some of the important compromises that we have offered—not on dual candidacy, because that is a manifesto commitment. In line with the Salisbury convention, I hope that the House of Lords will respect that, because it is fundamental to the Bill and to the integrity of a new electoral system for the Assembly.

Lord Elis-Thomas knows better than many the work and the preparation that needs to be done to enable the Assembly to make a smooth transition next May to the new arrangements, with a separate Executive and legislature. He does not want that essential work to be delayed by arguments over what his fellow Assembly Member, the Liberal Democrat Peter Black, has described as a

"distraction from the real issues in the Bill."

The real issues in the Bill are, of course, primarily concerned with giving extra powers to the Assembly and also with making sure that it acts as a proper legislature with an Executive who are accountable to that legislature—rather than a rather amorphous corporate body that has not really stood the test of time.

Royal Assent before the recess is vital and I am grateful that the hon. Member for Chesham and Amersham (Mrs. Gillan) and the hon. Member for Montgomeryshire (Lembit Öpik) have recognised the importance of that. The key immovable deadline that we face is the Assembly elections next May. Considerable consequential work is needed following Royal Assent and before the purdah period before the elections. That includes elections and disqualification orders, which need to be made in good time to set out clearly the basis on which all parties and candidates need to organise themselves and to allow adequate time for proper consultation with the Electoral Commission. The Bill includes a power for the Assembly to promote participation in and awareness of the elections—meeting an Electoral Commission recommendation. Clearly, there has got to be sufficient time for that.

Schedule 7 outlines the Assembly's ability to make primary legislation if there were to be a successful referendum. A key commitment is to fine-tune that and to bring forward an amendment order to ensure that it is complete and accurate before the elections next May so that everybody is clear about the new footing on which the Assembly will start. A considerable number of further orders are required—about 14—many of which are fundamental to the separation and include provisions for financing and staffing arrangements. They are critical when it comes to delivering the policy in the Bill, and have to be completed in good time before the next elections.

I hope that I have not taken too many liberties in explaining to the House the importance of getting Royal Assent by next Tuesday. If devolution is to continue to be a success, and the Assembly to help to improve the quality of people's lives in Wales, we need to move on—to go forward, not back. I urge Members to reject the Lords amendment and to disagree with the Lords on this matter.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

First, may I welcome the Secretary of State to the Dispatch Box? It may be the hottest day of the year both here and in Wales, but he always looks as though he has been out in the sun rather a lot when he comes to the House to grace us with his presence, so it is obviously weather that he enjoys.

Peter Hain (Labour, Neath)

Having a permatan does not prevent one from getting a cold.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

The Secretary of State took the words out of my mouth. He appears to be suffering. I am sorry that he is having so much aggravation with his legislation, both here and in another place. Of course, it is not just this Bill that he is having a little local difficulty with. I understand that there are negotiations on the Northern Ireland legislation, which must be preoccupying him a great deal. We all sympathised with him earlier in the year when he had to pull the Northern Ireland (Offences) Bill. It must always cause a great deal of difficulty in the office of the Secretary of State when legislation has to be withdrawn. [ Interruption. ] It was a pleasure to withdraw that piece of legislation—good, I am glad to hear that. We might be able to agree on that, but there is no doubt that we are not going to reach an agreement on dual candidacy. Notwithstanding any backroom deals that might have been done with other parties, we will continue to register our objections by opposing the provisions in principle. I think neither that the matter is boring, nor that it is something that we can just ignore.

It was always apparent from the way in which this aspect of the Bill was approached that a deal had been done—it was a deal between Cardiff and Whitehall—to keep Labour Assembly Members happy and dilute what they perceived to be real competition. In truth, it is competition that Labour Assembly Members cannot stand. The Secretary of State is quite right that various justificatory arguments for changing the electoral arrangements in Wales have been laid out by him, the Under-Secretary and Lord Davies of Oldham. However, it is worth having a look at them because I would not want to admit for one moment that the argument is lost. I think rather that the argument has been won, but that the Government have rolled on regardless.

First, we were told that the provision was a manifesto commitment. A manifesto commitment is a statement of intent, or even a wish. A party that was faced with the need to cling on to power by forming an alliance with another party—the Liberal Democrats, for example—would need to compromise on its manifesto commitments. Indeed, I believe that that has happened in Scotland.

The Labour party in Wales does not even need to enter into a coalition to give up on its manifesto commitments. Page 5 of its 2003 manifesto, "Working together for Wales", said that in the next Welsh Assembly term Labour would

"Scrap Home Care charges for disabled people".

However, on 15 February 2006, Dr. Gibbons, the Labour Minister for Health and Social Services, said:

"in view of all that we now know, it is clear that we cannot put in place our original plans equitably and affordably."

There we have a manifesto commitment that was easily put aside.

That was not even a one-off. "Ambitions for Wales", the Labour party's 2001 manifesto document, said:

"We will not introduce 'top-up' fees and have legislated to prevent them."

Of course, Labour broke that manifesto promise. It was only the Conservatives who forced the Labour party to remove those charges from Welsh students attending Welsh universities. The claim that manifesto pledges cannot be broken really does not hold water as a cohesive argument. Such pledges can be broken when it suits the Labour party.

Secondly, we are told that the system is confusing to the electorate and that we do not want losers to become winners. What nonsense is that? If the Labour party does not want losers to become winners, why has it admitted Baroness Jones of Whitchurch to the House of Lords today? If I remember correctly, she was the losing candidate in the Blaenau Gwent constituency in the general election. Labour Members say that they want losers to be losers and not to become winners, but I am afraid that that rings pretty hollow today. If the Labour party did not want losers to become winners, why did it introduce a list system at all? On the death or resignation of a sitting Member, the next person on the list—most arguably a loser—automatically moves into an elected position. The claim is paramount nonsense.

The electorate are confused not about dual candidacy provisions, but about the multiplicity of the voting systems that the Labour Government have introduced since 1997. We have the supplementary vote system for the London mayoral election, the proportional representation list system for European elections—except in Northern Ireland, where there is a different system—and indeed the single transferable vote system in Northern Ireland. I do not think that I need to go on. The multiplicity of the systems is confusing voters who have been used to first past the post. However, another change is proposed for Wales after only a short time.

What is the basis for the change? If it were based on fact, investigation, consultation or popular demand, I could understand it, but that is not the case. The only research that has been prayed in aid of the change is that of the Bevan Foundation. Despite the foundation's excellent credentials, that work was hardly its finest piece of research. Such a small, isolated, Labour-purchased report should hardly form the basis for electoral change. I have to tell the Secretary of State that I have received no letters from people demanding a change. I have heard no public outcry and have received no letters supporting the changes that he wants to make.

Wayne David (Labour, Caerphilly)

rose—

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

I am happy to give way to the hon. Gentleman who sponsored the research.

Wayne David (Labour, Caerphilly)

The hon. Lady has questioned the objective credentials of the Bevan Foundation on numerous occasions, but does she agree that it is significant that the Leader of the Opposition has contributed to its current review?

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

I was not casting aspersions on the Bevan Foundation—I was just saying that I doubt that it is happy, either with that small, imperfect piece of research or for it to be cited as the sole support for electoral change in Wales. The foundation has some excellent credentials, but that research is slightly lacking in my view and, I believe, in the hon. Gentleman's view, given his admission.

To justify the changes, the Secretary of State said that there is widespread, systematic abuse by regional Assembly Members. I have challenged him to produce evidence, as has Nick Bourne, the leader of the Conservative group in the Assembly. In a debate on this subject on 27 February, I asked the Secretary of State whether he had replied to letters that Nick Bourne had sent him on 4 November and 27 January. Since then, another letter was sent on 20 March. Of course, there is no evidence of abuse, which is why, I assume, the Secretary of State has not had the courtesy to respond to those letters. I am happy to give way to him if he would like to explain why he has not done so. Those letters are perfectly polite—if he would like to look at them, I have copies with me. It appears, however, that the allegations of abuse are another fabrication to try to justify the self-serving provision in the Bill.

There is a great deal of opinion against the introduction of such a system, which operates successfully only in Ukraine. The Electoral Commission was not convinced of the need for change. In its submission to the Welsh Affairs Committee, it concluded:

"In light of the need to encourage voter participation at the Assembly election in 2007, we would caution against any change that is perceived to be partisan and could add to a prevailing distrust of politicians.

On the evidence available to the Commission...we do not believe that the case for change has been made out."

The Electoral Society Reform said:

"We urge the Government to reconsider their proposal to ban dual candidacy, a controversial and divisive argument for which the case has not been adequately made."

During the Bill's passage through the House, we heard from the Arbuthnott Commission which, after 18 months of deliberation and discussion, following the submission of evidence, including verbal evidence, from a range of bodies and elected representatives at all levels, concluded that there was no evidence that dual candidacy was problematic for voters. Professor Sir John Arbuthnott said:

"Banning dual candidacy would, if you think about it, actually restrict voter choice and potentially diminish the quality of constituency contests."

The commission concluded that there was no case for change in Scotland, and there are no plans to introduce the system there. If it is not good enough for Scotland, why is it good enough for Wales? The Government have neither consulted on, nor examined, the changes in a responsible or thorough fashion. Indeed, in the 2006 annual report by the Wales Office, the Secretary of State said:

"The third commitment was to prevent candidates from standing on both the list and in a constituency in order to make all candidates genuinely accountable to the electorate. The Government believes that following two Assembly elections and experience of the Additional Members System there was a need to modify the system to prevent candidates from standing simultaneously in a constituency and on the regional list."

I assume that the reference to making "all candidates genuinely accountable" means that serving Assembly Members are not genuinely accountable. It means, too, that none of the list Members in Scotland, either before or after the next election for the Scottish Parliament, are genuinely accountable.

The Secretary of State is suggesting that there are two classes of Assembly Member. That is absolute rubbish, and it is not worth the paper it is written on. As I said, the Government have not consulted or examined the changes to the electoral system, or sought consensus. They have not respected the principles of the original devolution settlement in Wales but, as usual, they do things in Wales that suit Labour party politics. I will not support that course of action, so I urge my hon. Friends to agree with the Lords amendment and oppose the Government motion in the Lobby.

Paul Murphy (Labour, Torfaen)

I apologise for being a little late for our debate.

The Assembly elections will be held in about 10 months' time. The Assembly has done many good things for the people of Wales, but I believe that turnout will be low, which is unfortunate for Wales and for democracy. One problem is that voting in elections is affected by the enormous publicity created by the media. Even at the general election, turnout was reduced. The great bulk of the Bill that we have discussed in recent months will not excite the people of Wales to increase turnout. People vote when their lives are directly affected by an issue, whether it is the health service, schools or local government. Constitutional issues are interesting for politicians, but I am not convinced that the people who elected me are as excited about them as we are in the Chamber.

I do not understand for one second the reasoning of the hon. Member for Chesham and Amersham (Mrs. Gillan) on our manifesto commitment. She cited an Assembly manifesto commitment, but it was not an Assembly commitment, but a manifesto commitment made by Welsh Members who stood for parliamentary election to the House of Commons. She said that we should not break our manifesto commitments, and reeled off a list of accusations, but she went on to suggest that we should break that commitment. That is nonsense.

David Davies (Conservative, Monmouth)

The right hon. Gentleman is far wiser and has more experience of the House than I, but according to that argument, during the 18 years in which the Conservatives held sway, he would not have dared to question anything that we included in our manifesto. If we did not question things in manifestos there would not be much point in our coming to the House.

Paul Murphy (Labour, Torfaen)

I do not question the fact that Opposition parties should debate the manifesto of the winning party, but there comes a time when the upper House has to acknowledge that manifesto. My right hon. Friend the Secretary of State referred to the Salisbury convention, and our manifesto could not have made the position clearer. We wanted to change the rules on the Assembly, and people voted on that change. The hon. Member for Chesham and Amersham raised the issue of consultation—of course, those matters were discussed at the general election, and were extremely prominent in the run-up to that election. There was a party conference in Wales and those matters were discussed by newspapers and television companies—whatever their views on them.

The hon. Lady represents an English constituency, so she would not know about these things. However, when we travelled around our constituencies, we talked about those commitments, one of which was on the need to prevent the daft nonsense of dual candidacy. I would have gone much further than the Secretary of State in changing the electoral system in Wales, but that is an issue for another day. The hon. Lady is entirely right that the daft system for electing people to the European Parliament ought to be changed. The link between a Member of Parliament and the constituents whom they represent in the House of Commons is a jewel in the crown of our democracy. The added list needs to be looked at, but for all sorts of reasons we are not in a position to do that yet. At present we are abiding by that significant, obvious manifesto commitment to change the rules on dual candidacy.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

The right hon. Gentleman cites as the core element of his argument the rule that a manifesto commitment must not be broken. Can he confirm that he thinks it was utterly unacceptable for the Government to break their highly publicised manifesto commitment in 2001 not to introduce tuition top-up fees? The question is relevant, because there is no consistency in what the right hon. Gentleman claims his Government should do, and what the Government have done with regard to manifesto commitments.

Paul Murphy (Labour, Torfaen)

I agree with what the manifesto stated about these issues. The hon. Gentleman and I argued about this some months ago in this place. It is not relevant to what we are discussing. What is relevant is that the House of Lords debated the matter, made the arguments clear and voted accordingly. The matter has come back to the House of Commons and it is now up to Labour Members to honour those manifesto commitments and to ensure that what the people of Wales clearly voted for is honoured by the Government.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

The right hon. Gentleman protests too much about the Salisbury convention. Although the Liberal Democrats voted with us in the other place to produce the amendment that is presented for the House's scrutiny, and the vote was won by 133 to 114, I understand that a deal has been done with the Liberal Democrats whereby they will not challenge the House's decision in the other place, so they will not stand alongside us on a point of principle. Quoting the Salisbury convention is therefore almost pointless. Once a deal like that has been done, if the Liberal Democrats cannot stick to their guns, the Government will get their business.

Paul Murphy (Labour, Torfaen)

I did deals myself when I was Secretary of State for Wales, but that is another story. Whatever the situation, the House of Commons must recognise that the people of Wales voted on the matter and we must honour that.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I am delighted to hear that both the Conservatives and the Labour party do not want to make winners out of losers. In the case that neither party gets an absolute majority at the next general election, I presume that they will not seek to impose their minority manifesto upon the country. In that context I was more than a little surprised to hear— [Interruption.] I think I hear the laughter of agreement from the hon. Member for Chesham and Amersham (Mrs. Gillan).

David Davies (Conservative, Monmouth)

Can the hon. Gentleman assure us that if by any chance his party comes third, it will not seek to implement any of its manifesto on any of us?

Lembit Öpik (Liberal Democrat, Montgomeryshire)

The irony is lost on the hon. Member for Monmouth (David T.C. Davies), as usual. It is somewhat dog-in-the-manger to hear the bleating of democratic concern from Conservatives— [Interruption.] I am about to say something about the Conservatives, not about Labour. The hon. Member for Vale of Clwyd (Chris Ruane) should not provoke me. He would not like me when I am angry.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Order. Although I am pleased to find such good humour among Members, perhaps we should concentrate on the debate.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I was momentarily distracted, Madam Deputy Speaker, by the sheep noises from the hon. Member for Vale of Clwyd. Hopefully, his support for rural policies will follow from that.

There is a degree of schizophrenia in the way that the Conservatives approach issues of democratic mandate, but perhaps that is a matter for another day. I am frustrated by the apparent about-turn made by the right hon. Member for Torfaen (Mr. Murphy), who has my considerable admiration and respect, but not when he picks and chooses the manifesto commitments that he thinks his Government should see through. He is quite willing to see the utter abandonment—the U-turn—on other manifesto commitments, such as on student top-up fees, when that suits him. Let us remember that the Government could not have been any clearer in 2001 about their opposition to introducing student top-up fees, and went on blatantly to break that commitment. When the right hon. Gentleman comes to use his manifesto promises on this occasion, he will understand why some of us are rather cynical about when and where Labour right hon. and hon. Members choose to support their Government.

The second point, which I make to the Secretary of State, is that the Government did not win the last general election. They got roughly a third of the vote. [Hon. Members: "Oh!"] Hon. Members seem surprised by the mathematics of my claim. I think they will understand when I say that 35 per cent. support suggests to me that 65 per cent. of people voted against their proposition. Even in Wales, a majority of voters voted against the Government's manifesto, so they cannot realistically cite in defence of their proposal—any proposal—the claim that a majority of people in Wales voted for their manifesto commitment.

The amendment tabled by the Conservatives and ourselves reversed the Government's attempt to ban dual candidacy, for the reasons that we have discussed many times, some of which have been repeated by the Conservative spokesperson this afternoon. The amendment maintains the electoral status quo, with Assembly Members able to stand simultaneously for a constituency seat and on the list.

The Liberal Democrats have always maintained that the dual candidacy debate, which has attracted the most attention in the media of all the issues relating to the Bill, is not the single most important issue. It is, in a sense, a secondary procedural issue which has attracted a disproportionate amount of attention. The Bill is fundamentally about devolution and the extent and quality of the powers handed down to the Assembly. Nevertheless, since we are debating it and the Secretary of State is inviting us to rehearse the arguments again, let us recall briefly why there has been opposition to what he and the Labour Government seek to do.

The Clwyd, West problem is something of a red herring. The Government White Paper stated that the current arrangement for dual candidacy

"devalues the integrity of the electoral system in the eyes of the public and acts as a disincentive to vote in constituency elections",

presumably because candidates who lose constituency elections can become Assembly Members via the list. However, the Electoral Reform Society commented:

"It has been almost universally agreed that there is little evidence"

to back up the Government's claims.

In her submission to the Welsh Affairs Committee, Kay Jenkins, Head of Office at the Electoral Commission, said:

"There is no evidence that the Clwyd West so-called problem has had any impact on voter participation. . . We have got a very extensive body of research on what makes people vote and not vote across Britain and particularly specifically in Wales, and it is on that basis that we say it is not an issue we could say has ever been raised with us."

In their evidence to the Committee, Dr. Roger Scully and Dr. Richard Wyn Jones from the university of Aberystwyth cited a study that they had done. They said:

"The total number of people who mentioned anything at all as a reason for not voting in 2003 in our sample was 2; that is out of more than 500 who said they did not vote."

Let us remember that the Welsh Affairs Committee was split strongly along party lines on the matter and voted 5 to 4 to back the Government's stance. My hon. Friend the Member for Ceredigion (Mark Williams) voted against the Bill's proposals, as did the three Conservative members. There are no points for guessing the party affiliation of those who voted for it.

Faced with all that powerful evidence to suggest that the Government are pursuing their proposal for party interest rather than democratic interest—

Albert Owen (Labour, Ynys Môn)

Will the hon. Gentleman give way?

Lembit Öpik (Liberal Democrat, Montgomeryshire)

In a moment. I was about to say that we have one robust piece of research from the hon. Member for Caerphilly (Mr. David), which we will hear about after the break.

Albert Owen (Labour, Ynys Môn)

The hon. Gentleman says there is massive evidence and cited two people out of 500 who did not vote. What evidence does he have for the assertion that he keeps making—on Second Reading and subsequently—that the Labour party will benefit in Wales? He has none, so why does he keep repeating that it is acting for party political interests? He quotes evidence to back one argument, but he keeps asserting another for which he has no evidence.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

The reason is fairly obvious to all of us on the Opposition Benches and, I suspect, to a number of members of the Labour party. The reason is that the present electoral mathematics would make it, as far as we can see, attractive to Labour Members to try and separate the list from the constituencies. [Interruption.] Members just saying from a sedentary position that that is not the case does not alter my perception that it is the case. [Interruption.] Well, it is a perception; that is what I believe is going on.

Roger Williams (Liberal Democrat, Brecon and Radnorshire)

My hon. Friend is very perceptive.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

And I am a very perceptive individual, as my hon. Friend perceptively points out.

Having said that, let me respond to the plea for information by the hon. Member for Ynys Môn (Albert Owen) by citing the one piece of research that we have discussed in defence of the change. It comes from the hon. Member for Caerphilly. His research has been discredited as hardly scientific, but it is laudable that he still clings to the morsels of hope that it provides for his conscience in respect of seeing that this change needs to be made.

Wayne David (Labour, Caerphilly)

The hon. Gentleman refers to the research as my research. Does he not accept that it was conducted by an independent think-tank?

Lembit Öpik (Liberal Democrat, Montgomeryshire)

If the hon. Gentleman had reread a debate that we had in the past it would save me a lot of time in highlighting why we think that his research is desperately flawed. Indeed, I have little doubt that that research will go on to prove that he is the greatest politician who ever stood—in Caerphilly—and that Labour is the greatest party ever to represent Wales. [Interruption.] The sheeplike noises from Labour Members back up that assumption. My point is that that was the only research that we heard in defence of the change.

The final defence for the change, which we heard from the Secretary of State, is that the current electoral arrangements have been subject to, in his words,

"systematic abuse for party advantage by Opposition parties".

He must acknowledge that the Electoral Reform Society—which does not have a party interest in supporting one system or another—said that

"a ban on dual candidacy will not provide a solution to this dilemma—whether or not they are permitted to stand as constituency candidates, there is nothing to stop list candidates from targeting particular constituencies on behalf of their parties."

The ERS concludes:

"We urge the Government to reconsider their plan to ban dual candidacy, a controversial and divisive argument for which the case has not adequately been made."

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

Would the hon. Gentleman also like to acknowledge that even if the Secretary of State could not reply to the letters from Nick Bourne, the leader of the Conservatives in the Welsh Assembly, he did reply to Rhodri Morgan, under the Freedom of Information Act 2000, in respect of producing any evidence of the alleged abuse of positions by regional Members of the National Assembly for Wales? On 25 April, the reply came that the Government had not been able to uncover any such information. No evidence whatever of any abuse has been brought forward. Therefore, they are basing these electoral changes on a false premise.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I have to admit that I agree with the hon. Lady. That serves to underline the reason behind my response to the hon. Member for Caerphilly and others: they have failed to provide a plausible intellectual or objective defence of the change that they wish to make.

I ask the Secretary of State one last time to reconsider. Trying to make this change has not been the Government's finest hour. Whether or not they admit that, they must accept that the perception is that this is being done out of party political interest, and it is beyond us why they continue to pretend that it will go the slightest way towards preventing targeting by one party of a constituency held by another.

Roger Williams (Liberal Democrat, Brecon and Radnorshire)

Does my hon. Friend agree that the Government's proposals would not stop a successful list candidate in one election targeting a constituency for the next election? These proposals do not prevent that from happening.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

My hon. Friend is completely right.

There is a final piece of good news. If the Government's intentions are sincere, they will ensure that Labour Members who represent one constituency will not be actively involved in trying to win constituencies around their own. But of course we know that that will not happen; we know that in the competition of British politics, parties will attempt to gain seats from each other, because that is how politics in this country works. When the Secretary of State used in defence of the change the argument that it would make it more difficult to do that, he was ignoring one political reality above another. The argument on this entire matter has not been persuasively made, and I hope that, even at this late stage, the Government might think again.

Don Touhig (Labour, Islwyn)

I apologise to you, Madam Deputy Speaker, and to my right hon. Friend the Secretary of State for missing his opening remarks; it took me a little while to arrive in the Chamber once I saw that our business had started.

Devolution is still a confusing and divisive issue in Wales. Although the National Assembly for Wales has been in place for more than seven years, much work still needs to be done to convince people of its worth. My right hon. Friend the Member for Torfaen (Mr. Murphy) said on Second Reading on 24 January that when scrutinising any legislation before this House we must make full use of the Splott market test: how will that legislation affect the person shopping in Splott market on a Sunday? I apply the Blackwood high street test in much the same way. Seven years on, it is my belief that if we were to ask people their views on the Assembly's electoral system, a great many of them would say, "confused." They are confused by it. Why is it, they ask, that people who are soundly beaten in a straightforward first-past-the-post election can then guarantee themselves a place in the top-up on the party list system?

We have heard much wailing and gnashing of teeth from Opposition parties about winners and losers; looking around this Chamber, it is clear that we have a record of winning and they have a record of losing. For all the Opposition parties' arguments, it is surely unfair that a person—such as the leader of the Tories or the Liberal Democrats in the Assembly—who has been rejected by the electorate in a constituency in the direct election can then gain a place at the top of the top-up list and find themselves in the National Assembly. Indeed, I understand that they can then call themselves alternative AMs for the constituency that they represent. That is a bizarre practice, which I am told has the support of the Presiding Officer.

David Davies (Conservative, Monmouth)

The hon. Gentleman has a point, but although that is a bizarre practice it is a fault of the proportional representation system itself. Why does he not have the courage to come out and say that PR is a bad electoral system, instead of making subtle changes that will not prevent the situation he has described?

Don Touhig (Labour, Islwyn)

The hon. Gentleman and I might find ourselves in some agreement about PR, but that is perhaps a matter for another day.

People ask why it is that the party with the largest share of the vote in the top-up—the Labour party got 36.6 per cent. of the vote in the top-up at the last Assembly elections—is denied any seats as a result of that. My own view, for what it is worth, is that we should separate the first-past-the-post system from the top-up system so that the results truly reflect the wishes of the electorate.

It is a matter of some regret to me that the Bill does not do that. However, I accept that my Front-Bench colleagues have to gain the broadest possible consensus on a constitutional Bill of this nature, and although I believe that my proposals are right, they certainly would not produce a consensus—but then I have never been a consensus politician. The fundamental issue is how we can make this system more effective and more just. I believe that the amendment that my right hon. Friend the Secretary of State has tabled to overturn the Lords amendment is right, and it has my full support.

David Davies (Conservative, Monmouth)

I am one of the people who the hon. Member for Montgomeryshire (Lembit Öpik) referred to earlier: I voted and campaigned against the Welsh Assembly and I make absolutely no apologies for doing so. [Interruption.] In response to more noises from Labour Back Benchers, let me say that—as with members of Plaid Cymru, who are sitting in a Parliament whose location is perhaps not of their choosing, and members of the Liberal Democrat party, who have fought many elections under a voting system that they do not necessarily agree with—it is right that Conservatives who had opposed the Welsh Assembly were more than happy to accept it as a reality on the ground and to work constructively to try to ensure that it delivered stability for Wales. Seven years down the line however, it comes as something of a surprise to all of us that, instead of looking at why the voting turnout is not what it should be, the Government have decided to push through a subtle, but very sneaky, change to the electoral system.

In a very worthy speech, the hon. Member for Islwyn (Mr. Touhig) decried the overall system of proportional representation and pointed out that it means that people who have not gained the confidence of the majority of an electorate in a given constituency can nevertheless sit as Members of this institution. The right hon. Member for Torfaen (Mr. Murphy) made a similar point, and I have to say that I have a great deal of sympathy with that view. I do not believe in the PR system. I happen to agree with him that a Member's representing first and foremost the people who vote for him, rather than the political party that put him there, is indeed the jewel in the crown of our electoral system. But I then have to ask Labour Members why, if they believe that, they propose a subtle change to an electoral system that will allow the overall principle to continue, instead of having the political courage to come out and say, "We don't believe in proportional representation. We are going to scrap it completely and have either one or two Members elected to each constituency in Wales."

That would be an intellectually honest approach for Members who do not like the PR system to take. [Interruption.] I am quite happy to take interventions. But instead, those Members propose a change so subtle that very few people will understand it. This is where I begin to diverge from the right hon. Member for Torfaen, because the reality is that virtually nobody will complain that they wanted not this PR system, but another one. We are used to receiving hundreds of letters from our constituents about a variety of things—from the situation in the middle east to whether bears should be used in circuses—but I can honestly say that in my one year as a Member of this place, and in seven as a Member of the Welsh Assembly, I have not received a single letter suggesting that the current PR system is wrong and should be amended. Nobody has ever come up to me in the street and suggested that the system should be changed. I have heard many people, some from my own association, say, "Scrap PR altogether," but I have never heard anyone suggest that this subtle change to the system will make any difference to voter turnout or anything else.

So one has to ask why the Government are going ahead with this proposal, and the answer is that, yes, they are going to derive a straightforward political advantage from doing so. They know perfectly well that the minority parties benefit from the PR top-up system, so it is those parties—the Liberal Democrats, Plaid Cymru and the Conservative party—that will be most disadvantaged by the change that the Government are pushing through, and which they know very few people will understand. I am afraid that some of the reasons that they have come up with for the change—I tried to make a note of some of them—are absolutely pathetic. I have heard it said that AMs do not like regional Assembly Members competing with them in their constituencies, but those who say that seem not to have grasped the simple fact that, even if this change is made, regional Assembly Members will still be able to open an office in, and put up a sign in, the constituencies of existing Labour AMs, and some will still do so. If Labour AMs are doing their job properly, they will have absolutely nothing to fear from regional AMs.

The regional AM for South Wales East—the leader of the Liberal Democrats in the Welsh Assembly, no less—has often tried to portray himself as the AM for Monmouth. That never bothered me in the slightest, and do you know why, Madam Deputy Speaker? Because everyone would scratch their heads on reading his leaflets and wonder who the hell this bloke was who was pretending to be the AM for Monmouth, when they all thought that it was me. Such behaviour reflected rather badly on those people. If directly elected AMs are doing their job properly, they have nothing to fear from regional AMs who would like to think that they represent a constituency.

We have heard it said that it is unfair that a directly elected AM should have to contest an election against somebody who has already been doing the job for a couple of years, and who has been pretending to be the AM for the area. What this amounts to is that the Labour party, which has enjoyed a political monopoly in Wales for decades, is just a little upset at the fact that it is losing the advantage of incumbency. Instead of fighting against candidates who do not have all the advantages of sitting AMs or MPs, they are fighting against those who, to some extent, have the same opportunities and the same access to offices and leaflets, and they do not like it. They do not like competition on an equal basis.

The Government are pushing through a change that they know will mean that regional AMs will be in direct competition with members of their own party who are standing for the constituency seat. That is why this change will undermine the minority parties. The Government know the game and they do not want us to explain it, but we all know that the reality is that a regional AM will suddenly find themselves in direct competition with a colleague from their own party who is standing for the constituency in question. That is why the Government are pushing through this change. They can smile and laugh, because they know that most people will be lost when the change is explained to them. They know that the man on the Pontypool omnibus—if there are such things any more; that is perhaps a debate for another time, but thanks to the cuts, many such services are disappearing —[Interruption.]

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Order.

David Davies (Conservative, Monmouth)

Thank you, Madam Deputy Speaker. I am not going to talk about the No. 73 omnibus that runs between Chepstow and Cwmbran, because that one is disappearing as well. But the fact is that nobody on any of the few omnibuses that are left in Wales is talking about the need to change the PR system in the way that this Government propose. Tonight, they want to use their majority to push through a profoundly undemocratic change to the electoral system. I urge those decent members of the Labour party to forget about their party Whips, for once, to think about what is good for democracy in Wales, to reject what their Government are trying to do, and to support the Lords amendments tonight.

Albert Owen (Labour, Ynys Môn)

It is always a pleasure to follow the hon. Member for Monmouth (David T.C. Davies), with whom I agreed on a couple of points. However, there is no party political advantage to this proposal. The Opposition parties have had opportunities on Second and Third Reading, on Report and in the Lords to come up with evidence that this proposal will lead to a party advantage for Labour, but they have failed to do so.

Stephen Crabb (Conservative, Preseli Pembrokeshire)

The hon. Gentleman sat through, and read the evidence sessions of, the Welsh Affairs Committee, and he will have heard the Electoral Commission say that, regardless of whether this change will lead to a measurable party advantage, the mere perception of a partisan advantage is enough to undermine faith and trust in the democratic process. We have heard a lot of talk this evening about trying to achieve cross-party consensus, but through this proposal the Government have set their face against consensus.

Albert Owen (Labour, Ynys Môn)

I hate to correct the hon. Gentleman on facts and detail, but I was not a member of the Welsh Affairs Committee and I did not participate in that evidence session. I did read the report of that session, but I did not agree with it. Reference was made to perceptions, but what we need to talk about is facts and how we are going to move the Bill forward.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

If the hon. Gentleman wants to talk about facts, he has only to look at the vote that took place in the Assembly. The casting vote by the presiding officer, who had to vote in the way that he did, was the only reason why the motion was carried—it was all the Labour party AMs against the rest. What more evidence could there be of a partisan Labour position?

Albert Owen (Labour, Ynys Môn)

I am grateful to the hon. Lady for that intervention and I am very glad that my Labour colleagues in the Assembly agree with the Labour party in Wales. We stood on a very firm manifesto commitment. My Front-Bench colleagues will be very happy to know that I carry my copy of the manifesto with me and read it in great detail. This is a very serious issue, and on page 108 of the manifesto, there are three very clear statements about our intention to introduce the Government of Wales Bill.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

Will the hon. Gentleman give way?

Albert Owen (Labour, Ynys Môn)

We have had very unclear statements from the Opposition, so it is right that I read out those statements before giving way. The first says:

"In a third term we will legislate for a stronger Assembly with enhanced legislative powers."

Some Opposition Members disagreed with that idea during our debates and that is fine, but that is what our manifesto states. The second statement is:

"We will improve the accountability of Ministers by ending the confusing corporate status of the Assembly".

So it is very clear that that is what we are going to do, and we have the support of this House. These days, I am far more diplomatic than the Secretary of State on such issues. I understand that we have these debates, and I am not really worried about this legislation, but I am proud that we are standing by our manifesto commitments. One cannot get much clearer than the third statement:

"Alongside the changes we will prevent candidates from standing on both the list and in a constituency in order to make all candidates genuinely accountable to the electorate and to end Assembly Members being elected via the backdoor even when they have already been rejected by voters."

That is a very clear commitment and I stand by it. When I discussed the Assembly on the doorsteps of Ynys Môn, that very issue did arise, and I intend to vote with the Government.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

Does the hon. Gentleman therefore oppose the appointment to another place of candidates who obviously lost in the elections in Wales? Secondly, and perhaps even more importantly, is the hon. Gentleman really expecting us to believe that the Labour party voted for the proposed change, while all the other parties voted against, because it wanted to help all the other parties and thought of no particular benefit whatsoever for the Labour party?

Albert Owen (Labour, Ynys Môn)

Those two points do not relate to the clause. I think that the hon. Gentleman leads with his chin. I do not agree with the House of Lords per se. It is an unelected Chamber and I hope that I have the opportunity in this Parliament to vote for a democratic Chamber in the other place. That is where I stand on the House of Lords. As I have said, the hon. Gentleman leads with his chin because one of his colleagues is sitting in the Gallery, someone who has been rejected on several occasions by the electorate of north Wales. I do not think that that person or any others should be in the House of Lords. That is my answer to the hon. Gentleman.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Order. First, it is not in order to refer to whoever might be in the Gallery. Secondly, let us now concentrate on the amendment.

Albert Owen (Labour, Ynys Môn)

I apologise, Madam Deputy Speaker. I could not resist referring to the leader of the Liberal Democratic Party in Wales.

Don Touhig (Labour, Islwyn)

Does my hon. Friend agree that if the Liberal Democrats did not have a host of rejected parliamentary candidates, they would not have anybody in the House of Lords?

Albert Owen (Labour, Ynys Môn)

I shall keep with the amendment that is before us. However, I agree with my hon. Friend.

Our manifesto stated clearly what we were going to do and I am proud that we have adhered to that. However, my right hon. Friend the Secretary of State is perhaps too diplomatic with regard to the status of the House of Lords. We know the position. We have had great debates on Second Reading and Third Reading, and we have carried the measure through with a huge majority. Now, the House of Lords—no one has elected its members—feels that it can overturn our decisions. This is a constitutional issue. I believe that the Salisbury convention should be adhered to and that Opposition Members should not support the other place. Instead, they should vote for democracy. They should vote in accordance with the Labour party manifesto, Labour being the largest party in this place. We are entitled to govern on our manifesto.

Elfyn Llwyd (Plaid Cymru, Meirionnydd Nant Conwy)

The right hon. Member for Torfaen (Mr. Murphy) did not on this occasion pray in aid the piece of research from Splott market. We had an exchange on that during previous proceedings. The right hon. Gentleman said that he had discussed the matter in a few pubs in his constituency. He was asked questions about time and so on, but we will not go into that now. Suffice it to say that, on any objective view, I do not believe that there is any evidence upon which the change can seriously be put to us. Opposition Members know that, despite the sterling efforts of the hon. Member for Caerphilly (Mr. David) and the fantastic ground-breaking piece of research that he commissioned—it was not persuasive, but ground-breaking nevertheless—we have not been presented with very much.

The right hon. Member for Torfaen said that he never did deals. For someone who has been in high office in the north of Ireland, that is difficult to understand. However, I am sure that, as always, he is telling the truth. However, a deal was struck for the proposal to go through between the anti-devolution Labour party and the pro-devolutionists. That is what it is all about. It is a piece of red meat to keep those who are against further devolution happy. That may or may not be relevant to the debate.

We had a sterling speech, if a little ex-cathedra, from the hon. Member for Islwyn (Mr. Touhig). It was interesting in that he showed that he does not want to see anybody else getting elected in Wales other than Labour candidates. I believe that that is his true position. At least he is honest enough to say it, and I respect that.

I will not go through the evidence again because time is short and there are other important issues that we must discuss. However, I will touch briefly on one or two matters now. When the Secretary of State opened the debate he said that the Queen must give Royal Assent to the Bill at some time between now and Tuesday. The right hon. Gentleman detailed why that must be so, and I am sure that everything he said was right. He said that over the coming weeks and months there will need to be several references to the Electoral Commission for discussions and, if necessary, to vary regulations. On two occasions during his opening speech he prayed in aid the Electoral Commission. Why then was the electoral commissioner, Glyn Mathias, roundly ignored when he said that he thought that the proposal would be a partisan move and that there was no evidence to support it? Glyn Mathias commented on the research that the commission had undertaken. He said:

"This issue did not figure in that research. We asked a whole series of questions and sought unprompted replies and this issue did not arise...what concerns us is that there is no evidence whatever in the White Paper to back up this proposal...therefore, we came to the conclusion that we think that the case for change has not been made."

This is the same Electoral Commission that will be busy in the coming weeks and months when the Bill is enacted. In this instance it was roundly ignored on an important part of the Bill.

Pete Wishart (Scottish National Party, Perth and North Perthshire)

I am sure that the hon. Gentleman will recognise the booklet that is in my hand—the Arbuthnott report. It reached the same conclusion and found that there was no evidence to suggest that this was an issue for the public. In fact, Arbuthnott went further and suggested that dual candidacy was anti-democratic. Perhaps the difference between Arbuthnott and the Richard commission was that Arbuthnott was a cross-party document and was consensual, whereas the Richard commission was a Labour party inspiration which was there only to serve the Labour party.

Elfyn Llwyd (Plaid Cymru, Meirionnydd Nant Conwy)

I differ slightly from what the hon. Gentleman says about Lord Richard. I think that Lord Richard did a sterling piece of work and I would not level a charge of partisanship at him. However, I take the hon. Gentleman's point. The Arbuthnott conclusions were quite different.

I will not refer to the various academics who have been referred to at length in previous discussions, including Dr. Richard Wyn Jones and readers from the Napier university. As far as is known, the only other system that embodies the system that we are talking about introducing in Wales was in pre-revolution Ukraine. If we want to adhere to standards such as that, all well and good, but I ask must ask again where one might find the evidence for this change in the law? I cannot see it. Other hon. Members have referred to the Electoral Reform Society. There is a welter of evidence against the proposed change. The only thing in favour of it is the rather scant piece of research commissioned by the hon. Member for Caerphilly. The Government have brought the proposal before the House and have found that the only evidence to support it was commissioned by a Back-Bench Member of Parliament halfway through the proceedings. That is not persuasive.

Mark Tami (Labour, Alyn and Deeside)

The hon. Gentleman refers to the Electoral Reform Society as if it did not have an agenda. It clearly has an agenda, and that is why it is putting forward the views that it is.

Elfyn Llwyd (Plaid Cymru, Meirionnydd Nant Conwy)

What agenda does the Electoral Commission have? Would the hon. Gentleman care to speculate on that? I dare say that he cannot answer that question.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

In the document before me, it says that

"the Electoral Commission is an independent body established by the UK Parliament in 2000 by the Political Parties, Elections and Referendums Act. We are independent of the UK Government and political parties, and are directly accountable to Parliament."

Elfyn Llwyd (Plaid Cymru, Meirionnydd Nant Conwy)

This will go down as probably the most partisan change in the law in the last five years. Hon. Members may laugh because they are content with it; they know that it will assist them, so why should they not laugh about it? But others in different parties, others of no political affiliation and other academics throughout Britain and beyond have looked at this and come to the same conclusion. It is a partisan way of proceeding, and that is what we are arguing about. I do not say that it would necessarily benefit my party unduly, or indeed anybody else's, but it will benefit the Labour party, and that is why I am concerned about it. It is all very well referring to the Salisbury convention, but this is a bad piece of law that we are debating. It is partisan. I shall not refer to the other quotations.

Wayne David (Labour, Caerphilly)

Will the hon. Gentleman answer this simple question: how on earth will it benefit the Labour party?

Elfyn Llwyd (Plaid Cymru, Meirionnydd Nant Conwy)

That has already been explained fully. [Interruption.] How many times do hon. Members want to hear it? We have heard it from both sides of the House. Suffice it to say that my belief is that it will benefit the Labour party. It is not me saying so, but Dr. Scully, Dr. Wyn Jones and Dr. Weinstrob. I could go on—Sir John Arbuthnot. There are plenty of people to whom we could refer. Those people are entirely without political connection, and they have reached that conclusion.

This matter will be put to a vote, I believe on a matter of principle. I do not want to see the rest of the Bill being delayed, but this is a bad clause and the Lords are right in their conclusion on this part of the Bill at least.

Peter Hain (Labour, Neath)

I was gently rebuked by my hon. Friend the Member for Ynys Môn (Albert Owen) for being too diplomatic in my introduction, but I reassure him that I have been severely provoked this evening by the Opposition's contributions. The hon. Member for Chesham and Amersham (Mrs. Gillan) seems to question the Salisbury convention. She seems to pay no attention to that convention, under which, for generations, the unelected House of Lords defers to a manifesto commitment of the governing party in the elected House of Commons—a point ably made by my right hon. Friend the Member for Torfaen (Mr. Murphy). She seems to dismiss this. I do not know whether it is a new Conservative party policy—a party that had just 30 per cent. of the vote—that the House of Lords should be able to trample over all the manifesto commitments of the governing party, elected by the people to form the Government of this country. I disagree with her, because therein lies a recipe for constitutional confusion.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

It is not a question of rubbishing, ignoring or talking down the Salisbury convention; it is just that the right hon. Gentleman has done a deal with the Liberal Democrats, so the arithmetic adds up in his favour. It is as simple as that.

Peter Hain (Labour, Neath)

I would have been happy to do a deal with the hon. Lady, if she had shown the same support for the principle of devolution in the Bill as the Liberal Democrats, who in particular have the interests of Wales at heart, rather than the interests of narrow party concerns. I am surprised that she refers to us dumping manifesto commitments. The Leader of the Opposition almost daily dumps commitments from the election manifesto on which he and the hon. Lady were elected just over a year ago.

Mention has been made of Ukraine. The truth is that this issue has become controversial right across the globe, from Canada to New Zealand, not simply Ukraine. That evidence has been given at length in earlier debates in the House. I am asked for evidence. In the interests of brevity, I did not quote the evidence because it has all been quoted before, but I have a fistful of quotes and evidence, from Lord Carlile of Berriew, the former leader of the Welsh Liberal Democrats, speaking in the House of Lords on 15 June, and from Lord Richard, the chair of the Richard commission, in testimony to the Welsh Affairs Committee on 25 October. This is about Wales, but mention has been made of Scotland, so let us look at Scotland. The former Liberal Democrat Presiding Officer of the Scottish Assembly castigated the abuse of the system, saying that it had been thoroughly abused, and that was despite the code of conduct in Scotland, which we do not have in Wales. I could carry on providing all the evidence: there is the evidence of the chief of staff of the Scottish Liberal Democrats andof the leader of the Assembly Conservative group, on 14 June and again on 15 June. I could also quote some academic evidence.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

rose—

Peter Hain (Labour, Neath)

I just want to carry on with this point. A fistful of evidence has been presented during the debates in both Houses, but particularly in this House. I do not want to detain the House by repeating it all, although I am happy to do so if provoked. I do not know whether the hon. Lady wants to provoke me.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

I am certainly not trying to promote the Secretary of State, who is clearly struggling. [Hon. Members: "Promote?"] No, provoke. I certainly would not want to promote him, although I think that he would like to promote himself. The right hon. Gentleman made some obtuse remarks about what is happening in other countries. In Italy and Denmark, and in some regions of Germany, double candidacy is expressly required, and candidates have been permitted to run both in constituencies and in lists in Germany, New Zealand, Japan, Hungary and Russia, all of which have had mixed Member systems running since the 1990s. Therefore the throwaway line that the system is not used in other countries is not entirely accurate, and that is from the Electoral Commission's report.

Peter Hain (Labour, Neath)

The hon. Lady obviously did not listen to what I was saying. I said that the issue had arisen and that great concern had been expressed right across the globe.

Then the hon. Lady asks where in Wales the concern has arisen. I will tell her. I, and my hon. Friend the Under-Secretary, and my right hon. and hon. Friends, have had meetings up and down the country. At those meetings there was more burning anger among the public on this issue than on anything else. There was strong feeling about the need to put the voters in charge. That is the fundamental democratic principle at stake here.

David Davies (Conservative, Monmouth)

rose—

Peter Hain (Labour, Neath)

I will give way in a moment.

The voters should be in charge. If the voters kick somebody out in the constituency, why should that person pop up on the list and be elected? That is not the voters in charge; that is the party manipulating the system. In almost every case, those whom voters rejected in the constituencies in 1999 and 2003 popped up on the regional lists. That is why we are asserting the basic principle of parliamentary democracy that the voters are boss. If the voters reject somebody, they should not be elected by the back door. People do not understand how on earth that can happen and that is why we are correcting this widespread abuse. I say abuse, because it is not just a matter of principle, it is the fact that time and again we have seen regional list Members abusing the system by coming into constituencies claiming to be the elected Members for those constituencies when they are not. A Plaid Cymru Assembly Member has presented a dossier on how to manipulate the situation in the interests of her party, and that has been referred to at length in the House. I could go on and on, so I will allow the hon. Member for Monmouth (David T.C. Davies) to intervene to provoke me further.

David Davies (Conservative, Monmouth)

Many of us here are astounded that at these many meetings that the Secretary of State attended there was so much anger about a proportional representation voting system, yet nobody mentioned the health service, the council tax or the lack of dentists. He said that there was more anger about this matter than anything else. Is he living on the same planet as the rest of us?

Peter Hain (Labour, Neath)

The hon. Gentleman is a vocal but junior Member of the House. I was talking about consultation on the devolution Bill, on what should go into it, on the policy that should fulfil our party commitments following the Richard commission's report. At those meetings, people wanted to discuss the detail of what might transpire in a Bill to follow the recommendation of the Richard commission, which would command support across the House. That issue was one of the most strongly felt—indeed, there was bitter anger up and down Wales. Look at the situation in Clwyd, West, where the sitting Labour Member defeated all the other candidates, who all got elected nevertheless.

As my hon. Friend the Member for Ynys Môn has said, the Labour party will be equally hit by the provision, which will not benefit any party in particular. When we asked for evidence of how it could possibly benefit the Labour party, the hon. Member for Monmouth and others changed their tune and began to talk about perception. We want evidence: where is the evidence that the Labour party could benefit by putting the voters in charge?

I am grateful for the support of my hon. Friend the Member for Islwyn (Mr. Touhig), despite the fact that he has never pretended to be an enthusiast for more and more powers for the Assembly. He has worked with me honourably and with great influence in framing the Bill, for which I am grateful. I secretly sympathise with his advocacy of a first-past-the-post system, but if we were to introduce one in this Bill, we would hear even louder complaints of abuse.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

If the Secretary of State and the Government are so concerned about giving voters a choice, will they consider creating open lists? That would allow the electorate to vote for an individual rather than a party that then appoints an individual. Without being party political, that would be a rational and reasonable step forward, although I accept that it is not included in the legislation that we are discussing today.

Peter Hain (Labour, Neath)

No; I do not agree with the hon. Gentleman and do not propose to introduce such a provision at this late stage, especially given the consultation across Wales.

In conclusion, the basic point of the Government's position is that the voters should be in charge, not the parties, and that losers should not become winners. Why are the Opposition parties so scared of having to make a choice between standing in a constituency or standing on a regional list? The voters expect candidates to make that choice, and the integrity of the system will be increased by it, especially because at least six sitting Labour Members will be "penalised"—if that is the word—along with other party members. In my view, however, no one will be penalised; indeed, I think that the voters will win.

I welcome the point made by Lord Elis-Thomas, the Presiding Officer of the Assembly, who has said that the argument has been won—he has recognised the reality—and both former leaders of Plaid Cymru have made the same point. We need Royal Assent for the Bill before the end of the Session, and I hope that nobody will seek to frustrate that ambition and that the Government's position will be carried tonight.

Clause 94 — Legislative competence: supplementary

Nick Ainger (Labour, Carmarthen West and South Pembrokeshire)

I beg to move, That this House disagrees with the Lords in the said amendment.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

With this it will be convenient to take Lords amendments Nos. 21 and 22 and the Government motions to disagree thereto.

Nick Ainger (Labour, Carmarthen West and South Pembrokeshire)

The amendments would limit the effect of the powers to make retrospective provision in Orders in Council under clauses 94 and 150, or in an order under clause 149.

The power in clause 94 is necessary to correct legislative competence retrospectively when that would give proper effect to the intention of Parliament and the Assembly, when not to do so could leave the law in an unclear state, or when it could be detrimental to third parties if that was not done. If the provision is used, it is likely to be to correct a technical defect.

Clause 150(4) follows the model of sections 107 and 114 of the Scotland Act 1998. As Lord Evans of Temple Guiting pointed out on Third Reading in another place, it was necessary to make provision under those sections of the Scotland Act when it transpired that a provision of the Regulation of Care (Scotland) Act 2001 was considered to be beyond the legislative competence of the Scottish Parliament.

The Bill provides that any provision of a measure that is outside the legislative competence of the Assembly is not law. If another Act made provision referring to that measure, it might be necessary to amend that other Act as if it had never referred to the ultra vires provision of the Assembly measure. As the Scottish example shows, that will happen rarely, but the provision may well be needed.

The relevant provision in clause 149 relates purely to consequential amendments. For example, the Secretary of State might need to amend a corresponding reference in Northern Ireland legislation, which the Assembly could not do.

The Lords amendments intend to ensure that such provision can be made only if it is not to the detriment of those who have either benefited from or acted in reliance on the law before such an order was made. The Opposition case for that is based on an argument that the power could be used to reverse the effect of court decisions and infringe individuals' rights. That concern is clearly important—no one in the House wants the rights of individuals to be arbitrarily abridged. However, I cannot envisage circumstances in which that would be allowed to happen. The safeguards that the Bill already includes would prevent it.

First, the Secretary of State would have to act consistently with the Human Rights Act 1998. Secondly, such provision cannot be made at the whim of the Executive. If any attempt were ever made to abuse such a provision and use it in a way that was detrimental to the rights of individuals, Parliament could block it. All Orders in Council under clauses 94 and 150 and orders under clause 149 that amend primary legislation will be subject to full parliamentary oversight.

The power to make retrospective provision exists primarily to allow technical points to be tackled. Let me make it clear that the Government would not make an order that retrospectively altered a court's decision. If a future Government were to try to do that, Parliament would block it.

Dominic Grieve (Conservative, Beaconsfield)

What the Under-Secretary said is not the same as the comments of Lord Evans of Temple Guiting in his letter to Lord Kingsland. The letter stated that he would not move goalposts by seeking to change retrospectively the law on which a case was based while it was before the court and without the leave of the court. That is not what the Under-Secretary said. He went much further a moment ago. He said that if a court decision were to go against the Assembly or the Government, there would be no question of changing it retrospectively. Those are two different things. It is important for hon. Members to understand which we mean.

Nick Ainger (Labour, Carmarthen West and South Pembrokeshire)

Let me continue with my argument. Such a provision would never be used retrospectively to amend a court order, although it could be used, depending on the circumstances, to deal with the results flowing from a court's decision. I hope that that deals with the hon. Gentleman's point.

The Government do not envisage the power to make retrospective provision being exercised except in very rare cases. While I understand the thrust of the amendments, there are sound reasons why the Government cannot accept them. There could be public interest considerations in favour of making retrospective provision. It is not right that the Government should be prevented from taking the public interest into account in making legislation. Furthermore, the amendments are technically defective and would render the provisions that relate to retrospective provisions inoperable.

John Gummer (Conservative, Suffolk Coastal)

As a Minister, I always found that when civil servants said, "Minister, you have to do this because there is a public interest requirement," it was usually because they could not think of anything else. Will the Under-Secretary give us a practical example of when the public interest was so important that it necessitated what appears to many of us to be an unacceptable change?

Nick Ainger (Labour, Carmarthen West and South Pembrokeshire)

Yes, I can give an example. Let us imagine that both Houses of Parliament agreed a measure that related to a position following a public inquiry into the construction of a bypass. If, after compulsory purchase orders and payments had been made, a defect was found in the legislative competence, it would be in the public interest retrospectively to set the record straight in legal terms to allow the payments that had already been made to be retained, and no claims to be made against the individuals who had received the money from the compulsory purchase. That would enable the bypass to go ahead in the public interest, and not to the detriment of the individual who had received funds from the Government in exchange for the land. That is an example of the public good benefiting from retrospective legislation such as that for which clauses 94 and 150 provide.

It is impossible to identify with certainty all persons who could be in any way detrimentally affected as a consequence of such an order before it was made. It would therefore never be clear whether an order could lawfully be made, even if there were an overwhelming public interest in making it. I therefore invite hon. Members to reject the amendments.

Dominic Grieve (Conservative, Beaconsfield)

I am grateful that the Under-Secretary acknowledged that the clause, which was amended in the other place, raises serious problems. It is not common practice for the House to pass measures that can apply retrospectively. Retrospective powers enable the Government to interfere with private rights in a way that is contrary to the principles of the rule of law in this country. For the Under-Secretary to claim that the provision is simply a balancing exercise under the Human Rights Act 1998 is an inadequate response.

The Human Rights Act might be a basic safety net to deal with certain Governments who do not have democratic practices or who have had them only for a short period and do not enjoy the principles of the rule of law, but it does not replace the rule of law. Private legal rights operate because the rule of law says that they do, and because the judges say that they do. Sometimes, we have had to face the fact that the people who benefit from those rights appear to be remarkably undeserving of them. We have, for example, had debates about lords of the manor who have enforced a form of blackmail in respect of rights of way over common land until a court judgment removed them. However, no one in their right mind ever suggested that that entitled Members of Parliament to remove those people's rights retrospectively, thereby depriving them of a financial advantage.

The Government are contemplating a measure that is being introduced with a desire to rectify technical omissions—I fully accept that that is their intention—but that could have the unintended consequence of depriving someone of a private legal advantage, because it will be applied retrospectively. There is no suggestion in the proposals that any compensation would be made to a person who was thus adversely affected.

This matter was raised in the other place, and Lord Kingsland, who was speaking for the official Opposition, suggested that these clauses should be removed altogether. However, he was mindful of what the Government were trying to achieve. The amendments that were eventually passed therefore sought not to remove the retrospective power but to limit it by saying that such an order could be made, provided that it was

"not to the detriment of those who have either benefited from or acted in reliance upon the state of the law before the retrospective Order is made".

As an issue of principle, the Minister cannot possibly contend that that is an unfair provision. He might, however, say that the proposal would have the consequence of making it impossible to pass such a retrospective order. I can see his point. If that is his problem, however, he is going to have to find a way of solving it, either by specifying that anyone adversely affected would be entitled to full compensation or by some other method. It is not good enough simply to say that there will be a balancing exercise and that the measure would be used only in cases where the public benefit appeared overwhelmingly to outweigh the private advantage.

Private law and people's rights under the law are not about the balancing of public rights with private advantage. Private advantage has complete supremacy. The principle under which we operate in this country in maintaining the rule of law is that if we interfere with someone's private rights, as specified in the Human Rights Act and the European convention on human rights, we must pay them compensation for doing so.

I am really troubled to read the Government's approach to this matter. In the letter that Lord Evans of Temple Guiting wrote to my noble Friend Lord Kingsland, he said, with reference to the point at which the provision would kick in:

"The Secretary of State would have to consider any action carefully for its compatibility with human rights. He would not move the goalposts by seeking to change retrospectively the law on which a case was based while that case was before the court and without the leave of the court."

That is why I picked up the Minister's comment that the Government would not seek retrospectively to alter a court judgment. When I challenged the Minister on that, he started to back off a little. He left me with the distinct impression that the Government might choose to act retrospectively, before a case came to court, to prevent a person from exercising his legal rights and to challenge an order that had been made. He also left me with the distinct impression that there might be circumstances in which, notwithstanding a court judgment, the Government would still seek to apply the provision retrospectively.

John Gummer (Conservative, Suffolk Coastal)

Did not my hon. Friend hear the explanation that the Minister gave as an example of when it would be suitable to use this power? When he gave that example, he showed that the Government would be judge and jury in their own case. It would be for the Government to decide whether the use of the power would interfere with a person's private rights, and they would make that decision on the basis of their own convenience. The Minister tried to dignify the measure by talking about public value, but what he meant was the convenience of the Executive.

Dominic Grieve (Conservative, Beaconsfield)

My right hon. Friend is exactly right. This is what troubles me so much about the measure. Lord Evans of Temple Guiting's officials had clearly advised him very carefully when he wrote that letter. He expressed himself in terms so precise that, when Lord Kingsland looked at it, he said that he was wholly dissatisfied with the answer. The Minister has gone slightly further, but my right hon. Friend is correct. What the Minister is actually saying is that the Government will decide, when balancing the considerations involved, whether a private right would be interfered with. That must raise the possibility that, as long as the Government did not think that the private right interfered with was too serious a matter—so it might slip outside the ambit of the European convention on human rights—they would still feel justified in going ahead and applying the provision retrospectively. I am very happy with the ECHR, but it is simply a safety net in this context. Our practice in this country is not to allow such things to happen. Indeed, it would be quite contrary to every legal principle to let this occur.

I am fairly unsympathetic to the principle behind all this. I have to be honest about that. I believe that government by statutory instrument is riddled with problems such as these, and an Order in Council is no different from a statutory instrument; it just involves different wording. The reality is that Wales is going to be governed by Order in Council—a practice that I regard as absolutely abominable and an offence to every principle that we have in the House.

If the Government go ahead with this measure, I foresee that they might need to address certain problems. May I suggest to the Secretary of State and the Minister, both of whom are in the Chamber, that if they want to get this provision on the statute book but do not like the form of words that the Lords have come up with, they should make a clarifying statement to make it absolutely clear that if it is established that private legal rights are affected retrospectively in any way, the person affected will be entitled to redress. Without that assurance, I will remain profoundly unhappy about this proposal.

This is a classic example of administrative convenience triumphing over private rights, all dressed up, in good new Labour style, in the assertion that it is for the public benefit. I do not accept that. What is more, the Government know that they are on pretty shaky ground here. I urge the Minister to go away and think again.

In the other place, the Liberal Democrats appeared to support us on this issue, and I hope that that will remain the case. It was unclear, however, when the vote was called, whether they were really going to provide proper support in that important Division. Some of them said they would support us but did not. I have no idea why that happened. I hope that it is not part of the Lib-Lab pact on this issue, by which the Liberal Democrats have demeaned themselves in the course of the discussions on this important constitutional measure.

We will certainly resist the motion to disagree with the Lords amendment, although I have no doubt that the Government will carry the day. If the Secretary of State and the Minister do not like the form of words that the Lords have used, they should go back and provide proper reassurance when the Bill returns to the other place that the provision will not be left in the form to which they now wish to return it.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I am interested to hear talk of a Lib-Lab pact. I presume that the hon. Member for Beaconsfield (Mr. Grieve) is referring to two parties working together in the common interest, just as the Conservatives and the Labour party did when they voted together to take us to war in Iraq. What is going on here, however, is a genuine commitment to furthering democracy and devolution in Wales. I almost said Northern Ireland then, because I saw the Secretary of State leaving the Chamber, no doubt to deal with other important matters.

Our concern is, to an extent, the same as that described by the hon. Member for Beaconsfield, namely, that retrospective legislation is open to attack on the basis that it can be abused. Something achieved by an individual or an organisation acting in good faith, on the assumption that the law is there to protect them, can be modified by the institutions of Government to favour themselves. That point was made by Lord Thomas of Gresford in the upper House. He said:

"A person may engage in litigation and say, 'I've won.' Then the Assembly may pass a measure that says, 'No, you haven't, you've lost", because they have retrospectively changed the provision on which his claim rested."

That has been my concern, too, and it may be why the hon. Member for Beaconsfield could see an uneasiness among Liberal Democrat peers during that debate.

No doubt the hon. Gentleman will also have read the further debate in the upper House on this matter and the dialogue between Lord Thomas of Gresford and Lord Evans of Temple Guiting, in which Lord Thomas challenged the Government to clarify two things. I hope that the Minister, by way of intervention or in his concluding comments, will respond explicitly to these points. Lord Thomas's concern was that it had to be underlined that the power would be used only to correct situations in which a measure had been made that was ultra vires through no fault of people acting in good faith and, presumably, within the law. I note that Lord Evans responded that that was correct.

I would like the Minister explicitly and for the record—we know that the record can be used in a court of law—to underline that that is his understanding of the Government's intention, and that it would be utterly unacceptable for the legislation to be used for any self-seeking purposes by an Administration—not Labour, Conservative or Liberal Democrat, but any Administration in the Welsh Assembly.

The second specific concern expressed by Lord Thomas of Gresford related to the question whether the Assembly could use the legislation to remove from a litigant a victory achieved in litigation. Once again, Lord Evans of Temple Guiting underlined the point that it would not be acceptable under any circumstances for the Welsh Assembly Government to reverse successful actions by litigants by using the Bill as a blocking mechanism to change legislation retrospectively. I seek the Minister's assurance—once again, for the sake of the record—that that is explicitly the Bill's intention.

I recognise that however hard we try to close these loopholes, there is a danger of abuse of any legislation. Despite the assurances given to Lord Thomas of Gresford on those two points in the upper House, and in anticipation of the Minister underlining them today, I acknowledge that we are still vulnerable to the abuse of power by individuals in government or whole Governments, should they be so minded. We are talking about a limited insurance policy here, but it is probably the most that we can ever expect when we are discussing legislation.

The hon. Member for Beaconsfield usefully requested that the Minister put on the record some form of words to encapsulate the assurances that we seek. I suggest that one of the best forms of words is offered by Lord Kingsland, who tabled an amendment debated in great detail in another place. It would have inserted the words:

"provided that such an Order is not to the detriment of those who have either benefited from or acted in reliance upon the state of the law before the retrospective Order is made".—[ Official Report, House of Lords, 13 July 2006; Vol. 684, c. 840.]

It strikes me that a small modification to that amendment, expressed by the Minister, could be helpful without in any way being detrimental to what the Government are seeking to do.

It would be helpful if the Minister confirmed that the Government want to modify the legislation as they have set out, but also explicitly to require such an order not to be to the detriment of those who have benefited from, or acted in reliance upon, the state of the law before the retrospective order was made. That would be a very helpful clarification. I can see no contradiction between the Bill as it has been put forward by the Government and the intentions as they have been reasonably expressed by the hon. Member for Beaconsfield.

Dominic Grieve (Conservative, Beaconsfield)

May I point out—the hon. Gentleman may already be aware of this—that that is exactly what the amendments passed in the House of Lords say? They do not seek to knock out the power to make the retrospective legislation; they seek to insert that very form of words. The Minister says that that presents difficulties. The hon. Member for Montgomeryshire (Lembit Öpik) may agree with me that in those circumstances the solution is for the Minister to find a form of words that meets the spirit of what has been said, but does not have those difficulties attached to it.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I said a few moments ago that I was reading the amendment tabled by Lord Kingsland, so the hon. Gentleman and I violently agree that that is the source of my recommendation.

Although I see the force of the hon. Gentleman's argument about the amendment, I have, on reflection, accepted the Government's point that this retrospective latitude is probably, in limited circumstances, desirable and that it could be compromised were the Lord Kingsland amendment included in the Bill. However, I believe that its wording, as a statement of clarification, would be both helpful and consistent with the intent of the amendment. It would not in any way detract from the applicability of the retrospective facility in those areas where it could legitimately be used.

I ask the Minister those three questions—including the two from Lord Thomas's inquiry in another place, which I have recited—and ask whether he is willing to reiterate the words in Lord Kingsland's amendment by way of clarification and reassurance on this reasonable and very specific point, to protect the interests of those who might otherwise be concerned that they would be harmed unfairly by the application of this retrospective facility.

John Gummer (Conservative, Suffolk Coastal)

The whole House should be grateful to the hon. Member for Montgomeryshire (Lembit Öpik) for explaining to the world the Liberal Democrat approach to a complicated matter. It is to discuss it in as many ways as possible and to give no hint whatsoever as to how one should proceed thereafter.

There is a real problem in debating whether to disagree with the Lords amendment in that we are debating a virtual Bill. Many of us, although perhaps not all Members on the opposition side of the House, believe that an extension of the powers of the Welsh Assembly is a good thing, but we would wish it to be presented to the people of Wales so that they could make up their minds. All this is a mechanism for trying to avoid asking the people of Wales whether they want what is in the Bill, in case they say that they do not want it. We get to this point and that becomes even clearer, because the Government have now discovered that directing the affairs of a nation by Orders in Council has a number of disadvantages, and there may be occasions when overlapping jurisdictions and particular facts mean that a bit of tidying up is necessary.

I am always worried when Governments present their proposals as modest. I am always worried when they seek to suggest that there really is not very much in the measure—it is a matter of convenience that may be for the national good and those of us who are concerned about the principle of retrospection really should not worry about it.

There seem to me to be three reasons why we should worry very much. First, there is the Government's historic attitude towards retrospection. In two successive Finance Bills, they have introduced retrospection while pretending that it was not retrospection. That leads me to be suspicious when the word "retrospection" comes from this Government's mouth. Secondly, when the Government explained what they meant by the occasions on which they might use the provision, they produced an argument that seemed to nullify their own case. Let me turn to what the Minister said about the road that might have been built and the compensation that might have been paid. It seems to me that the Minister would decide not according to what was in the public interest, but according to what was convenient for the Government. It would be very inconvenient for the Government to have to go through the whole process again, but it might be very good for them because it might stop them getting into that kind of mess again. That is what legislation is about—setting the rules. If one breaks the rules, one should not have a nice little back-door mechanism of letting off the Government. The Government should have to fight their end, like anyone else, and in the course of doing so find that there were matters that were detrimental to private interest, and issues that ought to be taken up. All that would be hidden by this nice little trick, which is used by Government to make their life easier.

Thirdly, if the words of my noble Friend Lord Kingsland are not accepted, that means that the Government will not stand by the content of that amendment. The Government are therefore saying that they might use retrospection when it overpassed the private rights of an individual, as defined in the Kingsland amendment. The Government must deal with that problem. On the one hand, the Government say that they would use such powers only on occasions when that would not affect individuals who would otherwise have been in a different position had the law as they thought it was continued. On the other, they are not prepared to include that provision in the Bill, as that is what refusing to accept the amendment means.

With cunning ingenuity, the Liberal Democrat spokesman has discovered a way through. If the Government say that they believe that the amendment is right, he says that he will be happy. Well, if the Government can say that the amendment is right while at the same time advising the House to vote against it, that seems a peculiar position. I would not advise the Minister to take that line. Only a Liberal Democrat could get himself into that position. Only the party that on one doorstep tells people that it believes in one thing, and on the next doorstep that—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

Order. I remind the right hon. Gentleman of the nature of the amendment being considered.

John Gummer (Conservative, Suffolk Coastal)

I stand corrected.

I return to the nature of the amendment and repeat that on this occasion the Liberal Democrat advice is that the Government should ask the House to vote against something that the Government say they believe in. That is a remarkable achievement and ought to be emphasised.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I recognise the intellectual genius of the right hon. Gentleman. He and I usually agree in the Chamber. Did he not hear my point about the difference of opinion between us? I suggested that I was persuaded that the amendment, were it adopted, would make the legislation difficult to apply. Therefore, while I am enjoying his contribution—and were we on "Just a Minute" I would give him a point—does he accept that it is a judgment about what works as legislation that causes me to make this suggestion to the Minister? I have no difference of view with the right hon. Gentleman in the intent of his speech and the concerns of the hon. Member for Beaconsfield.

John Gummer (Conservative, Suffolk Coastal)

I am still bemused because the hon. Gentleman is now saying that were the amendment carried, the clause would be difficult to use. He therefore wants the Minister to say on the record that he accepts the amendment, so that, in his language, it could be used in court, but he does not want the Minister to include it in the Bill. If including it in the Bill would make the legislation difficult to use, how would such a statement by the Minister make it any easier to use—or have I missed his point?

Lembit Öpik (Liberal Democrat, Montgomeryshire)

Yes, the right hon. Gentleman has missed it. There is no point in pursuing a dialogue with him any further, as it is for the Minister to explain. In my judgment, however, while Kingsland's amendment was a good descriptor of the intent of the legislation, it was not a well-phrased amendment.

John Gummer (Conservative, Suffolk Coastal)

I would therefore advise the hon. Gentleman to suggest something different. I suggest that he says to the Minister that he will vote against the Government upholding the amendment unless the Minister comes forward with a promise that he will find another form of words that enables the sense of my noble Friend Lord Kingsland's proposition to be maintained, but without the disadvantages that he asserts are there, about which the hon. Gentleman happens to agree. That would be a convenient way forward.

I have one further comment to make. I do not believe that we should have any possibility of retrospective legislation. Certainly, retrospective legislation by Order in Council and Government fiat is never acceptable, even if it might be convenient. I wish the Government to consider the history of this House and our constitutional arrangements, and I point out that the strength of our defence against retrospective legislation distinguishes us from other countries. For that precise reason, we can say that the rule of law is more firmly rooted here than anywhere else.

The Minister may think that this is a small matter, but it is in fact a most important principle. It would help him and us if he were to promise to produce a better form of Lord Kingsland's proposal so that this issue does not hold up the Bill. I am sorry that the Government produced the Bill and that they did not offer the choices publicly to the people of Wales. Instead, he and others have had furtive back-of-the-room discussions. He promised to do it in that way, however, and I would prefer to have the Bill in those circumstances than not to have it at all. In my view, however, he cannot have the Bill if he wants retrospectivity without protections, as he does at this moment.

Nick Ainger (Labour, Carmarthen West and South Pembrokeshire)

I note that the right hon. Member for Suffolk, Coastal (Mr. Gummer) is fundamentally opposed to any retrospection in legislation. He also said, however, that the use of Orders in Council was a back-door method, a trick and so on. Let us consider how the process would work in principle.

Were a measure identified as defective, or being used in a way that was ultra vires, the Assembly would have to propose an order that would come to this place for pre-legislative scrutiny. Once the measure had been scrutinised—I am sure that at that stage any individuals who might be affected by it would make their views known—it would have to return to the Assembly with any suggested amendments. The Assembly would have to abide by the European convention on human rights; it could then send the House of Commons a draft measure which would be debated in both Houses.

Given all those checks and balances, I can assure the right hon. Gentleman that the proposal is intended only to correct any technical defects and deal with any issues that are ultra vires. I can also assure him, as did my noble Friend Lord Evans, that the Orders in Council and the ultimate Assembly measure could not overturn a court decision. I hope he appreciates that.

What concerns everyone—I understand the concern—is the possibility that, in principle, an individual's rights could be affected. Let us consider what has happened in Scotland. Since 1998 this provision has been used once to deal with an ultra vires issue, a technical defect in legislation passed in the Scottish Parliament. That is why we want the clauses to remain as they are.

I hope I have been able to reassure the hon. Member for Montgomeryshire (Lembit Öpik) that the proposal is intended to deal with technical defects and issues that may turn out to be ultra vires, that there is no intention of using the procedure to overturn any court decision, and that the rights of the individual will be protected.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I am grateful for the Minister's reassurance. To save a bit of time, I ask him to confirm that as far as the Government are concerned, the measure must never be used

"to the detriment of those who have either benefited from or acted in reliance upon the state of the law before the retrospective Order is made".

Nick Ainger (Labour, Carmarthen West and South Pembrokeshire)

I cannot use those terms, because it is not possible to use them. I can only tell the hon. Gentleman that the rights of the individual, about which everyone is concerned, will be protected by the very process of the Orders in Council. People are rightly concerned, but as I have said, the provision has been used only once in Scotland since 1998, and it is intended to deal with technical defects.

I think that we have got hung up on the example given by Lord Kingsland. I do not know whether it is such a good example. I have responded to what he said about a bypass and compulsory purchase. There is no way in which an individual's rights would be overturned, and a demand be made that he pay back the money. The Government and the Assembly will certainly take the individual's rights into account, although there may well be rare occasions on which action must be taken for the sake of the wider public good.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

rose—

Nick Ainger (Labour, Carmarthen West and South Pembrokeshire)

Let us talk about the reality. The provision will be used extremely rarely, and as I have said, individuals who may be affected will be able to make representations.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I suffered the most appalling attack from the right hon. Member for Suffolk, Coastal (Mr. Gummer), an accidental defence of the Government. I sought no greater reward than a simple clarification using the words of Lord Kingsland. I hope that the Minister will not make me regret my experience of the slings and arrows from the Conservative Benches. I ask him what is so difficult about agreeing to what appears to be a common-sense form of words—the amendment proposed by Lord Kingsland—to reassure us all that the legislation will never be used

"to the detriment of those who have either benefited from or acted in reliance upon the state of the law before the retrospective Order is made".

That is not a difficult question.

Nick Ainger (Labour, Carmarthen West and South Pembrokeshire)

I think I have given the hon. Gentleman the answer: it will not be used in those circumstances. That is not its purpose. The hon. Gentleman is well aware of the extensive process of consultation with the Assembly.

John Gummer (Conservative, Suffolk Coastal)

rose—

Nick Ainger (Labour, Carmarthen West and South Pembrokeshire)

I think I have responded to all the points that have been made, and I am conscious of the time.

Clause 103 — Proposal for referendum by Assembly

Peter Hain (Labour, Neath)

I beg to move, That this House disagrees with the Lords in the said amendment.

This amendment removes the Secretary of State's discretion over how and when to lay a draft referendum Order in Council before Parliament if the Assembly passed such a request on a two-thirds vote. The purpose of clause 103 is to ensure that the Secretary of State responds to a request from the Assembly within a proper time scale. It is right that such a request cannot simply be sat upon.

The effect of this amendment, however, would be to compel the Secretary of State to lay a draft order before Parliament within 120 days. I recognise the concern that the Secretary of State—perhaps one less charitable towards devolution than I—should not be able to obstruct the will of the democratically elected Assembly and that for the Liberal Democrats, that is a particular point of principle. I understand that fully. The commitment of the Liberal Democrats to devolution and to primary powers for Wales is long established, and I fully understand the concern that a move to primary powers should not be frustrated by a hostile Secretary of State. I would not support that myself, but of course I am sympathetic to primary powers and always have been. However, if any Government were bent on frustrating the will of the Assembly, this amendment would not be enough to stop them.

A hostile UK Government could always resort to primary legislation. After all, Parliament is sovereign. The real safeguard—I know that the hon. Member for Montgomeryshire (Lembit Öpik) has real concerns about this point—is political. Any governing party in London that sought, arbitrarily or on some point of dogma, to block a decision by two thirds of Assembly Members in Cardiff would pay a heavy political penalty. They would be run out of town, just as the Conservatives were in 1997 for similar behaviour.

I respect the intentions of the Liberal Democrats and others who proposed the change, but I do not believe that this amendment will achieve the desired outcome as effectively as the Bill as it currently stands does. If a Secretary of State were wilfully to attempt to thwart the clear will of the elected representatives of the people of Wales, after a referendum request had been given full and detailed consideration by the Assembly, and approved by at least two thirds of Assembly Members, the consequences would be grave, both politically and constitutionally. There would be a real crisis and the Secretary of State would clearly be in the wrong.

The Government's objection to this amendment is not because we wish to aggrandise the role of the Secretary of State. Nor do we wish to put in place some kind of mechanism for thwarting a two-thirds majority of the National Assembly. Indeed, I do not see a real difference of principle between the concerns expressed in the House of Lords and by the hon. Gentleman and other Liberal Democrats, and the Government's position. It is a question of how to achieve the same end, and we do not think that the amendment is constitutionally appropriate. I shall explain why.

If an order is to be laid before Parliament, that is properly a matter for a Minister of the Crown. It would not be constitutionally appropriate for the Assembly to be able to force the Secretary of State to lay a draft order before Parliament, regardless of whether the Secretary of State was even ready to do so. The Secretary of State, as a member of Her Majesty's Government, cannot be accountable both to Parliament and to the Assembly. The Secretary of State—for that matter, any Minister of the Crown—is accountable to this House and to Parliament. He cannot at the same time be accountable to an Assembly. That is the clear issue at stake. However, the intention of this provision is not to create a new roadblock. As I have said, the Secretary of State would be likely to face irresistible pressure to lay the Order in Council. Nonetheless, the Government believe that it is important to maintain proper lines of constitutional accountability.

There are also genuine practical reasons why the Secretary of State should not be constrained to lay a draft order within 120 days. He or she would still have to comply with the requirements of clause 102 before doing so, including the preparation of the draft order itself and a statutory consultation—a point made very persuasively by my right hon. Friend the Member for Torfaen (Mr. Murphy). The draft order would have to be laid before the Assembly before it was laid before Parliament. The amendment would leave no scope whatsoever to alter that time scale, should it not prove possible to complete all those steps within 120 days. The amendment does not take account of those practical considerations, of the requirements of clause 102 or of the obvious point about parliamentary sovereignty and accountability. I repeat that the Secretary of State is accountable to Parliament, not to the Assembly, although I would certainly want to act in keeping with the wishes of a two-thirds majority of the Assembly.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

I have listened to the Secretary of State's comments with great interest and I acknowledge that he is genuinely attempting to acknowledge the concerns as highlighted by my Liberal Democrat colleagues in the other place and others. To an extent, his remarks have been reassuring and helpful. However, he has not answered the underlying question. Why not give the full authority to call and plan a referendum to the Welsh Assembly? Why does the Secretary of State need to have any role in that procedure? I understand that this Secretary of State thinks that that is necessary, but I would be interested to know his rationale.

Peter Hain (Labour, Neath)

I am grateful to the hon. Gentleman for his intervention and I appreciate the open-minded and constructive way in which he has sought a resolution to this and other outstanding points in a way that will allow the Bill to receive Royal Assent by the end of next Tuesday. If primary powers were to be granted, it would be by decision of this Parliament. The Assembly cannot grab the initiative. It is for Parliament to decide whether it is right for the Assembly to have primary powers. I hope that all parties will help the Bill to receive Royal Assent through their response in the House of Lords next Monday and that they accept the principle that Parliament cannot accept the decision on calling a referendum to trigger the primary powers—a fundamental step—being taken by anyone other than this House and the House of Lords.

I am trying to be as helpful as I can be to the hon. Gentleman, because he has sought to improve the Bill, not to block it or wreck it, in great distinction from the behaviour of the Conservative party throughout its progress.

Frankly, it would be an act of utter folly for anyone in the Secretary of State's position to attempt to obstruct the will of the people of Wales. Welsh voters simply would not tolerate it. Even a sceptical Secretary of State—we had plenty of those before 1997—would find it impossible to ignore such a request from the Assembly. The Government of the day would have to give the request the most sympathetic and serious consideration and ultimately, in my view, support. But it cannot be a rubber-stamp decision, for the constitutional reasons that I have explained.

Don Touhig (Labour, Islwyn)

I am following my right hon. Friend's argument. Will he confirm that, under our constitutional arrangements, the Assembly cannot require this House to pass legislation? The Assembly may request that, but, at the end of the day, this Parliament of the United Kingdom holds the ultimate responsibility for law making in this land and only this Parliament can grant full powers to the Assembly.

Peter Hain (Labour, Neath)

That is absolutely the case. I agree with my hon. Friend. I could not have put that better myself. That is the point that I have been seeking to make.

I want to make a secondary point. Let us also remember that it will still be for the Secretary of State to consult on the draft order before the Assembly can vote on it. That is the sequence in which things happen. After an Assembly request, a draft order would be drawn up, and then the Assembly would consider the draft order and vote on it. It could be highly significant if it turns out that the Assembly itself is not happy with the content of the order. It will have started the clock ticking under the amendment—120 days—and be unable to stop it, even if there was a process of interaction between the Assembly and Westminster on the detail of the order. The way in which we have framed things at least offers a sensible consultation process that could prove crucial in the final forming of the referendum, its wording and the process of the vote.

Lembit Öpik (Liberal Democrat, Montgomeryshire)

The Secretary of State is right to say that, throughout, the Liberal Democrats have sought to improve the Bill rather than to block it, and it is in that context that we have had the dialogue. In the context of what he is saying now, will he accept and register the fact that we still feel unease because we cannot be guaranteed that any future Secretary of States for Wales will necessarily be sympathetic to the referendum? How can he feel confident that the arrangement that he has constructively laid out will nevertheless not offer an opportunity for, for example, an anti-devolutionary Conservative Secretary of State for Wales to prevent the referendum from taking place, given that he is not giving us a time-limited period by which the Secretary of State must necessarily have laid the referendum before the House?

Peter Hain (Labour, Neath)

The resolution of that problem does not lie in the Lords amendment, because even if the Lords amendment were carried, the Assembly could not compel Parliament to do anything. In the event of, as the hon. Gentleman puts it, an anti-devolution Conservative Secretary of State—I suppose that there might be one of those creatures around in the future—wanting to do that, there would be an almighty constitutional bust-up. It would not be in Westminster's interests, and I do not even think that it would be in the interests of an anti-devolution Conservative Secretary of State, to behave in that way. It would cause a real conflict. If a Conservative Government were determined not to grant primary powers despite the Bill, and not to call a referendum, that would be a political battle that had to be had. That relates to the point made by my right hon. Friend the Member for Torfaen. Despite the clear route map that the Bill lays out towards primary powers via a referendum—when it gets Royal Assent, that will be on the statute book—if a hostile Conservative Government, who were never going to give Wales or the Welsh Assembly what they wanted in those circumstances, were determined to stop that, Parliament would be sovereign. However, that would create not just the constitutional crisis that I described, but a political crisis for the Conservative party that would be extremely damaging to its future prospects in Wales.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

I grateful to the Secretary of State for giving way, because he is having his love-in and his little backroom deal with those on the Liberal Democrat Front Bench —[ Interruption. ] I am certainly not jealous; I do not want to be catching the Secretary of State's germs by getting that close to him— [Hon. Members: "Oh!"] Well, I feel sorry for him. He is not feeling well, you know. Notwithstanding all those silver-tongued words and the ridiculous picture that is being painted of an anti-devolution Conservative Secretary of State for Wales—I am glad that he acknowledges that there is going to be a Conservative Secretary of State for Wales—the issue with the amendment is all about his having proconsular powers so that he can control the timing of any referendum that is given to the people of Wales. Is that not the fact of the matter? If we do not allow the Lords amendment to go through, it means that he can act as the lord and master of Wales, calling the referendum whenever he wishes. That is the truth of the matter, because, of course, he and the First Minister and the Welsh Labour party are not in the business of calling a referendum that they may lose.

Peter Hain (Labour, Neath)

I find that the most extraordinary of the contributions that the hon. Lady has made during the debate. She is somehow setting herself up as the defender of the Assembly against a reactionary Secretary of State—if we were talking about a Conservative Secretary of State for Wales, we would have a reactionary Secretary of State by definition. To set herself up somehow as a champion of the Assembly against the rights and necessities of parliamentary sovereignty defies reason. I will not even attempt to respond any more, because she is smiling away—she does not really believe what she said, any more than anybody else does. The way that she has behaved, which I regret, right the way through the course of the Bill is to seek to frustrate it at every point and to seek to oppose the greater devolution of power to the Welsh Assembly. I am proud of what the Bill does in relation to the greater devolution of power. I am also proud that it offers the prospect of primary powers for the Welsh Assembly if a referendum triggers them. If a referendum does that, there will be primary powers.

Paul Murphy (Labour, Torfaen)

The Secretary of State has made the constitutional points extremely well and I agree with him. But does he agree that there is a political element to this matter, too? Any decision to go ahead with the referendum to seek primary powers for the Assembly would have to be the result of political consensus between the Government, Parliament, and the Welsh Assembly Government. That is important, as is any vote in the Assembly. The Assembly on its own does not reflect completely the views of the people of Wales, because we have a role in that as well as Members of the House of Commons. The political reality would be that there would have to be an agreement and a consensus between Parliament, Government and the Assembly.

Peter Hain (Labour, Neath)

Again, I could not agree with my right hon. Friend more. He is absolutely spot on. The proposal in the Bill—but certainly not the amendment—would require active partnership between the Assembly Government and the United Kingdom Government. In a sense, it requires that—rather than an Assembly elected at a different stage in the electoral cycle ending up, as it were, being able to instruct this Parliament, which is elected at another stage in the electoral cycle.

I think that we are seeing much fuss about nothing. Given the clear assurances that I have given to the hon. Member for Montgomeryshire, I hope that the House will not divide on this matter and will accept the principles of the Bill and see it as a tremendous advance for Wales that will settle the whole issue for generations to come. Then, instead of constitutional matters, we can get on with debating better housing, better jobs, better health services, better education and all the other things that concern the people of Wales in their daily lives.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

If there is a commitment to devolution, it is necessary to ask why the Secretary of State would want to exert a power of refusal that would put him on a collision course with the Assembly of the day about the very powers that his Government have brought forward. The Government's spokesman in the Lords, Lord Davies of Oldham, said that this was not an issue of seeking to aggrandise the Secretary of State, but that is the effect of the power and everyone in the House knows it.

The power allows the Secretary of State both to delay and to obstruct the Assembly's wishes and process and to remove or delay the ability of both Houses of Parliament to have a say in the matter. After two thirds of the democratically elected Assembly had voted in favour of holding a referendum on part 4 powers, why would the Secretary of State wish to act as a road block to such a provision receiving consideration in the House?

The whole process is fairly tortuous, but as I understand it, if the requisite two thirds of Assembly Members voted to pass a resolution in favour of a referendum, the First Minister would have to give notice of the resolution to the Secretary of State. Within 120 days of that, the Secretary of State must

"lay a draft of a statutory instrument containing an Order in Council...before each House of Parliament".

If the order was passed, a referendum would be held to decide whether the part 4 provisions would come into force. However, if the Lords amendment is not allowed to stand, the Secretary of State will be able unilaterally to give notice in writing to the First Minister that he refuses to lay an order and merely give his reasons. The order simply would not have to be laid and the Secretary of State could block the process from reaching Parliament.

During the debate in another place, Lord Kingsland— [Interruption.] Hon. Members should listen to this. Lord Kingsland said:

"The real shift in power is from this Parliament to the Executive and the Secretary of State."— [ Official Report, House of Lords, 28 June 2006; Vol. 683, c. 1237.]

And a shift of power it is. The provision places the Secretary of State in a proconsular position over Wales—as the lord and master. It interposes a single member of the Executive between the Assembly's decision and the order resulting from that decision reaching Parliament for a vote. The process certainly does not square with the Government's response to the House of Lords Select Committee on the constitution, in which they said:

"The Government agrees that this is a matter for Parliament to decide",

because the Secretary of State is placing himself in the dominant position.

The Bill has been characterised by the ingenuity that has enabled the Secretary of State to say one thing in Cardiff and another in Westminster. The provision, like the part 3 powers, gives the Secretary of State the opportunity to say pompously in Cardiff that he is proudly enshrining in legislation for the very first time the possibility of full law-making powers, while saying here that he has put a provision in the Bill to stop a referendum from being held if that does not suit him, or if he does not like the timing. In other words, he is saying here that he will not let the Assembly dictate to him.

Rhodri Morgan—the First Minister—the Secretary of State and Welsh Labour are not in the business of calling a referendum that they are going to lose, so the Secretary of State has taken a power that will allow him to block that. The Conservative party has made the decision to support a Welsh Assembly that works for the people of Wales. We will do that in a straightforward manner, not with weasel-like—

It being three hours after the commencement of proceedings, Mr. Deputy Speaker put the Question already proposed from the Chair, pursuant to Order [this day]

Public Accounts

Edward Leigh (Conservative, Gainsborough)

I beg to move,

That this House takes note of the 4th, the 7th to the 9th, the 12th to the 34th and the 36th to the 42nd Reports, and the Second Special Report from the Committee of Public Accounts of Session 2005-06, and of the Treasury Minutes and the Northern Ireland Department of Finance and Personnel Memoranda on these Reports, Cm 6699, 6728, 6743, 6766, 6775, 6789, 6843, 6863 and 6884.

It is a pleasure to welcome Members to the Public Accounts Committee debate, albeit a bit late. In view of the late hour, we should perhaps question whether our procedure in years gone by, when we had an annual debate, was not a better way of generating interest, but we can no doubt pursue that later through the usual channels. I am sure that the debate will be interesting. We will potentially be here until a quarter to midnight—and why not? This is a very important subject.

The last such debate, which took place in January, was considered worth while by Members in all parts of the House. We examined the Committee's work in driving value for money in public services, and the encouraging assurance was received from the Financial Secretary to the Treasury that the Committee would make an important contribution to the 2007 comprehensive spending review. Given its continuing preference for objectivity over partisanship—not something for which this Chamber is generally noted—the incisiveness of our investigations and the quality of our reports, thanks to the help of the National Audit Office, I hope that today's debate will act as a powerful engine for both discussion and change within Whitehall.

The Financial Secretary described as a tour de force the paper on delivering efficiency savings that we published before the last debate, and I understand that it is now widely used in Whitehall. I will quote widely from a report that we published only today, entitled "Delivering High Quality Public Services for all". I hope that it, like the last generic report, will be widely used in Whitehall.

I am of course proud to be the Chairman of the Public Accounts Committee, which is the oldest Committee in Parliament. Until recently, we thought that it was set up by Gladstone in the 1860s, but I have done some research and I found that a Public Accounts Committee met as long ago as the 17th century. For instance, in 1690 the Public Accounts Committee, which, I am afraid to say, was not friendly to the regime of James II—I regret that, as a Jacobite—reported that:

"The ships built, rebuilt and repaired by these commissioners were fully and well performed, and the buildings and other works by them erected and made during the continuation of the same commission were done with great exactness, sufficiency and frugality of expense in the managery and conduct thereof."

I have searched for a Treasury minute in reply to that excellent report, but I have not found one. I am sure that that incompetence is entirely due to the current Treasury team—three and a half centuries later and we are still waiting for a reply to the PAC report of 1690.

Ian Davidson (Labour, Glasgow South West)

I rise because the hon. Gentleman mentioned 1690. Is he aware that many of my constituents demonstrate regularly to celebrate an event that took place in that year—indeed, many demonstrate against events that took place in that year—but that none of them demonstrates to celebrate the anniversary of the PAC?

Edward Leigh (Conservative, Gainsborough)

Well, we have obviously failed to make our mark. But of course, we live nowadays in times when venality is not an issue in public life, is it? The Committee to which I referred earlier looked at the affairs of Pepys's friend Richard Cooling, the Lord Chamberlain's secretary, no less, who

"told us his horse was a bribe, and his boots a bribe; and told us he was made up of bribes...and that he makes every sort of tradesman to bribe him; and invited me home to his house to taste of his bribe-wine."

That is one of the problems that that Committee dealt with.

Given that the hon. Member for Glasgow, South-West (Mr. Davidson) takes an interest in the Royal family, I shall point out another such debate that I found. The Committee took place on the Floor of the Whole House and, according to the journal of the House of Commons,

"Some expressions were frequently used which seemed to glance at the licence and disorders and extravagant expense of that place"—

the court—

"not without some reflections which, aimed at the lady"—

I do not know who she is—

"and the exorbitant power exercised by her and this imperious way of proceeding, confirmed those in their wariness who had no mind to oppose or contradict the party that they would and meant should prevail."

So we think that the Public Accounts Committee has been holding the court and the Government to account for the best part of three or four centuries, and we continue to do so.

For instance, only this year we published 31 reports—at least twice as many as any other Committee—on a range of vital issues since the last debate. We found, to take one example, that as of September 2005, one third of our armed forces were not as ready as they should have been, and we called on the Ministry of Defence to clarify its plans for bringing the armed forces back up to required readiness. A plainly ridiculous situation was also uncovered whereby massive overpayments were an inherent part of the tax credit system. In short, whoever designed the scheme—perhaps it was the Treasury, although I do not know—knew that it would lead to overpayments before they even introduced it. This created a worrying situation for hundreds of thousands of vulnerable families who had to find money to finance repayments.

It has to be said that many people have been helped by tax credits, and I acknowledge that. However, many families have been made sick with worry about the need to pay back money that they do not have money that they have been given and have now spent. With more than £1 billion lost through claimant error and fraud in 2003-04 alone, money is leaking from the tax credit system faster than the water from London's antiquated pipes.

We have also concluded that consular service staff have shown tremendous dedication and determination in helping British nationals in distress, and we pay tribute to them. That is particularly in relation to the nine major overseas emergencies of 2005. In the same report we recognise also the steps that have been taken by the Foreign and Commonwealth Office to improve its emergency plans, especially in the light of its experience during the tsunami, when its call-handling system was overwhelmed.

We are also, I am afraid to say, the Public Accounts Committee for Northern Ireland while Stormont is suspended. We took evidence from the Department of the Environment on the problems that had been developing in implementing a waste management strategy for Northern Ireland. In particular, we took the Department to task for failing to show strong leadership under the greening Government initiative. It responded by agreeing to establish waste reduction and recycling targets equivalent to its Westminster counterparts.

We found again and again that the quality of governance in Northern Ireland has been below par compared to the rest of the United Kingdom. It is a hugely over-governed part of the United Kingdom and perhaps too much emphasis, understandably, has been placed on peace and security, and not enough on good governance. I was talking to a Minister in the Northern Ireland Office this evening, who assures me that that is now changing and that the Department is trying to achieve the same sort of value-for-money targets in Northern Ireland that have been the norm in the rest of the United Kingdom. That is to be welcomed. I hope that the Treasury will keep a close eye on what is happening there.

A number of our findings have reached the very top of the news agenda. Even today, I think that we might be making the news. April was the Committee's highest-profile month given the number of articles published. This was largely the result of revelations regarding foreign national criminals. According to The Daily Telegraph,

"this tale of incompetence has come to light only because of the assiduity"—

those are the words that are written above the door of the Committee's Chairman, apparently put there by Gladstone—

"of the Commons Public Accounts Committee, one of the few agents of public accountability we have left in our neutered democracy."

My hon. Friend the Member for South Norfolk (Mr. Bacon)—I pay tribute to him—was rightly afforded special praise for his persistent pressing on this issue, not least by Ministers, who congratulated him. The former Home Secretary, the right hon. Member for Norwich, South (Mr. Clarke), was a big enough man to acknowledge the role played by my hon. Friend. When people say that the only route that is worth while in this place is to be either a Minister or a shadow spokesman, they should bear in mind my hon. Friend, who has devoted his parliamentary years to serving on a Select Committee. That shows what can be achieved on Select Committees. We are grateful to him.

Other reports that we have published have received a large amount of publicity. One such report is the cancer plan. Our reports on health are always of great interest. We have produced reports on our railway stations, the Diana fountain and many other matters. How instructive it is in our celebrity-obsessed society that we can waste billions on fraud and error in the Department for Work and Pensions, but if we are lucky our report will reach page 15 of the Financial Times. If we talk about a paltry £1 million or £2 million wasted on a concrete memorial in Hyde park, we have wall-to-wall coverage in all the newspapers. That is something that we have to live with.

I have been especially encouraged by the Government's acceptance of the Committee's recommendations. The Department of Health accepted the need to provide all cancer patients with a formal assessment of the support that they need to manage the pain, stress, and anxiety caused by their cancer. The Department for Education and Skills agreed to review the curriculum after we recommended that school lessons be made more relevant to pupils who were reluctant to attend school.

In all, 94 per cent. of the Committee's recommendations were accepted by the Government. I am delighted to pay tribute to the Treasury and the Treasury minutes in ensuring such a high strike rate. But we have to ensure that our recommendations are not just accepted but implemented, and we want to do more work with the NAO on that.

We would not be influential were it not for the quality and dedication of the Committee's members and staff. I pay tribute to Mr. Nick Wright and his colleagues for all the work that they do. I thank those who have left the Committee since the last debate—the hon. Members for Bristol, West (Stephen Williams), for Hemsworth (Jon Trickett) and for Orkney and Shetland (Mr. Carmichael). I also welcome those who have since joined—the hon. Members for Islwyn (Mr. Touhig), for Mid-Dorset and North Poole (Annette Brooke) and for Southport (Dr. Pugh). All the other existing members continue to work hard, to hold the Government to account and they all deserve congratulation, and I give it.

I also pass on the Committee's regards to all its staff and their continuing commitment to the Committee's work, and of course, and not least, to the NAO, whose professionalism and impartiality make our work possible. One of my ambitions in the time left to me serving on the Liaison Committee and chairing this Committee is to see other Select Committees make more use of the NAO. In the past, there has been a tendency for the PAC to be too possessive about the NAO, and we should use it more as a resource to help other Committees hold Government to account, particularly on the estimates and expenditure account side.

The trouble is that the scope of the Committee's work is so wide-ranging that I could just go around a series of disjointed issues, but one issue in particular stands out. As the Government look forward to the 2007 comprehensive spending review, so the debate on the effectiveness of increased spending on public services in recent years gathers pace. This is now central to our democracy, particularly as apparently the two parties are growing closer in ideology and there is more and more emphasis on how to deliver more efficient public services, given the increased resources that are devoted to that.

To contribute to that debate, I want to discuss the extent to which increased investment in public services is meeting what should be the most important test of its effectiveness: its impact on the end user—such an obvious remark, but something that may not always be at the forefront of our minds in political debate. I want to highlight six key ingredients of user satisfaction with public services. They are all very topical and they are all contained in the 63rd report that we published only this morning. Those six key ingredients indicate where public money has been spent well, and where there is still some way to go. They feed, I hope—and I hope that the Minister will respond to this—the Government's fundamental review of public spending priorities.

I start by quoting paragraph 18 of the report. It is a significant paragraph and I hope that the Government take note of it. Bear in mind that this is an all-party report, agreed by 15 Members of the House of Commons. It states:

"Public bodies also need to consider how the structure of organisations can affect the planning and delivery of services. The public sector becomes more complex as it grows in size, as the commissioning of new projects and services leads to overlap between departments. For example, if a new agency is created to tackle childhood obesity, headed by a government-appointed 'tsar' and equipped with a small office staff, its powers and field of responsibility will overlap with those of other departments, such as the Department of Health, local education and strategic health authorities. As the agency becomes embedded within the overall government framework, its interaction with these other departments will evolve to 'iron out' overlapping provision, but there will nevertheless be a time period in which less-efficient practices occur. The more rapidly the government decides to expand the public sector the more likely this is to occur. Political pressure to establish or expand the public provision of a service as quickly as possible will increase the likelihood of such projects being ill-defined and poorly planned, wasting public money in the process and possibly slowing down improvements."

I particularly recommend that paragraph to the Minister.

Let me quickly go over the tests. First, the most basic requirement of a public service is that it should be accessible, but too often that is not the case. The Committee uncovered a wide geographical variation in the use of National Institute for Health and Clinical Excellence-approved cancer drugs, including those for breast cancer, across the country—again, there was a lot of publicity and public interest. We found that people in some less affluent parts of the country—typically the north—may lose out when it comes to cancer care, because cancer networks in some deprived areas lack comprehensive service plans.

Access to public services can also be affected by complexity in how services are delivered. For example, complicated processes can deter people from claiming benefits. Language is another potential barrier preventing people from accessing public services, but it is an area in which the Government are making progress, which the Committee has acknowledged. Our report on adult literacy and numeracy highlighted progress in reaching those with language needs, thanks in part to the increased Skills for Life budget. There has been progress, but more can be done.

Secondly, once demanded, public services should be delivered as promptly as possible. Failure to do so can cause inconvenience, hardship and disruption, and, at its most serious, put lives at risk. Over the years, the Committee has repeatedly highlighted the importance of getting it right first time in benefit decision making, which means making decisions quickly and accurately to guard against clogging up the system with appeals and revised benefit assessments.

Thirdly, public services should respond to the needs of users, which is obvious but is not always done. Failure to take into account what people want can result in unsuitable services that cause inconvenience, dissatisfaction and, sometimes, hardship for users. To design services around the needs of users, providers must first have a thorough understanding of what users want. Incidentally, all these points are illustrated by practical examples in the report, but there is no time to go through them now.

Fourthly, public services will ultimately fall short of expectations if users and providers fail to communicate effectively with each other. Call centres are one increasingly common way for people to communicate with public bodies, but they are also an increasingly common cause of frustration and dissatisfaction with public services. Our investigation of tax assessment found that some staff on telephone helplines lack the detailed knowledge to respond consistently and accurately to inquiries.

Fifthly, public services need to set and meet high standards. One way to improve the quality of public services is to introduce appropriate incentives and targets. For example, the Committee recommended the greater use of financial penalties to drive up the standard of facilities in Britain's railway stations. I was so appalled by the disgusting state of Market Rasen station in my constituency that I brought my own incriminating photographs to the hearing, where a panoply of highly paid members of the railway establishment were in front of the Committee. My photos of waiting room graffiti captured the squalor pretty well and, although I do not have the photographic genius of Robert Capa or the hon. Member for Great Grimsby (Mr. Mitchell), they made a difference and things have changed. Standards in public services can also be improved by involving public service providers that are capable of meeting the diverse needs of different groups in society.

Finally, even if standards are world class, people will not be happy if services cost what they consider to be too much. As a consequence, providers must publish, publicise and contain costs. And users of services need to know about the costs that they will incur. People must be told how much they will pay when, for example, they contact a public service by telephone. It is also important that money is not wasted. Some money never makes it to a programme's front line, because it is swallowed up in management costs. For example, about one third of Learn direct funding went on overheads in 2004-05, and the Committee urged UFI—the University for Industry—to channel that money towards learners instead.

By outlining the Committee's recent findings on users' experiences of public services—some positive, some negative and some highlighting areas for improvement—I hope that we have contributed to the debate on the effectiveness of increased spending on public services, which is helping to inform the Financial Secretary's work on the comprehensive spending review.

In my final few minutes, I want to move on to explore some important developments in other aspects of the stewardship of public money. In January, the Comptroller and Auditor General issued a disclaimer on the Home Office accounts, which were not only riddled with errors but delivered too late for his staff to audit in time. Such a disclaimer is virtually unprecedented in relation to a great Department of State. It is extraordinary, not to mention deeply concerning, that such an organisation should fail so spectacularly to render its accounts to Parliament.

The Home Office invited yet more accusations of incompetence following the Committee's inquiry into returning failed asylum applicants. The sheer perseverance of the Committee, particularly my hon. Friend the Member for South Norfolk, brought this to light. We not only highlighted a serious immediate threat to the well-being of the public but pointed to what the former Home Secretary was compelled to describe as "a serious systemic failure" in his Department's ability to understand what was happening with foreign national criminals. The Government aim to address the clear need to improve the performance of Departments for their departmental capability reviews. I look forward to assessing those reviews and their implementation in the coming weeks and months.

We welcome the other developments that will give the Comptroller and Auditor General more opportunities to ensure the wise spending of the nation's money. It is encouraging that HM Treasury has asked the National Audit Office to review the economy, efficiency, and effectiveness with which the Financial Services Authority has used its resources when discharging its statutory functions.

We note the progress of the Company Law Reform Bill, which will give the Comptroller and Auditor General the right to audit non-departmental public bodies that are companies. We are pleased to see the continuing progress of the National Lottery Bill, which will finally give the CAG access to the information that the National Lottery Commission holds for the purpose of vetting people involved in running the national lottery.

We always return to the BBC in these debates—and why not? The Committee would like assurances regarding the CAG's access to the BBC and to central Government money channelled through local government. It is with great interest that I note the discussions between the Department for Culture, Media and Sport and the NAO regarding the establishment of a baseline against which to judge the BBC's future efficiency programme. I welcome the Government's recognition that the NAO should have an expanded role in assessing the BBC's value for money, but I urge them to do more to enhance parliamentary scrutiny of the BBC. It is ludicrous that the CAG should not have freedom to select the topics that he wishes to examine. We cannot have a situation whereby what is in effect a public body is spending £3 billion-worth of public money, and the main external auditor on the behalf of the taxpayer—the CAG—has to go cap in hand to the BBC to agree a programme of investigation. He should have the right to go where he wants. As the Government introduce different funding mechanisms for local government through local area agreements, it is imperative that proper parliamentary accountability of these funds remains.

Following the Committee's recent visit to Washington DC, where Congressmen have far more power over appropriation than we do, it is clear that there is scope to improve parliamentary scrutiny of Government spending plans. We wrote as a Committee to the Chairman of the Liaison Committee, the Father of the House, who is also a member of our Committee—I pay tribute to his work on it—proposing that departmental Select Committees devote more time to the scrutiny of expenditure plans. We also drew his attention to the willingness of the NAO to provide support for that. We discussed this in the Liaison Committee last week—I hope that I am not giving anything away—and interest was expressed. The Hansard Society has published a report on the subject, and we have our own PAC report on it. I agree that we will never—or not rapidly—move to a situation whereby we are like Congress, where the President proposes but ultimately Congress disposes, with line- by-line control of the budget.

Nevertheless, there must be some progress towards returning to Parliament's traditional role. I cited the 17th century, when this sort of debate produced a civil war. Nowadays there is virtually no line-by-line scrutiny of the estimates. That is a worrying shortfall in what Parliament's work should be about. If we can provide other Select Committees with more help from the NAO, we will not magically persuade the Government suddenly to give Select Committees line-by-line procurement powers. However, if they can at least set up the processes and have the knowledge, it might be possible for the Government, or a future Government, to start creating more interest in the appropriation procedure and business. Parliament is fundamentally about that and was set up to perform that function.

I have given a brief outline of the Committee's valuable and challenging work in the past six months. I expect our work in the next six months to be just as challenging and, I hope, valuable, with investigations into a wide range of topical issues, including NHS financial management.

David Taylor (Labour, North West Leicestershire)

The hon. Gentleman has led the Public Accounts Committee with distinction, and some of the reports satisfied Parliament about the economy, efficiency and effectiveness of public expenditure in five sixths of the United Kingdom—the country of England. Does he believe that he has adequate powers to focus on the public expenditure that is funded by the generous Barnett formula in Scotland, Wales and Northern Ireland?

Edward Leigh (Conservative, Gainsborough)

I may have personal views, but I am supposed to express those of the Committee. I am told that there is an adequate Public Accounts Committee in Scotland and similar mechanisms in Wales.

Jim Devine (Labour, Livingston)

The Public Accounts Committee in Scotland is good. When the Conservative party was in power, it introduced the internal market into the Scottish health service. It surprises me that Public Accounts Committee reports do not mention the public sector's purchasing power. There were 32 different prices for cornflakes, and the Conservative Government extended that to beds, bandages and breakages. The internal market in the health service gave the private sector a licence to print money. Does the hon. Gentleman agree that the public sector should standardise its purchasing policies, whether in local government or the health service, for chairs, beds, pens, tables and so on?

Edward Leigh (Conservative, Gainsborough)

Of course I agree. I give the Government credit for setting up the Office of Government Commerce. There has not been time to deal with that vital issue in my few remarks but we all agree with the hon. Gentleman that what he outlines is an extraordinarily important part of saving public money, and that a great deal of progress remains to be made.

In the next six months, we shall consider NHS financial management, the Rural Payments Agency, including the single payment scheme, which had all sorts of problems, and the Child Support Agency. Our distinguished Committee has been a force in ensuring that taxpayers' money is spent wisely and effectively. I commend its work to the House.

Sarah McCarthy-Fry (Labour, Portsmouth North)

One of the frustrating aspects of the Committee's work is the time lag between our hearing, the subsequent reports and the Treasury's response. In January, when Public Accounts Committee reports were previously debated on the Floor of the House, I found myself, as a new member of the Committee, in an interesting position because I had not participated in any of the hearings on the reports that we were discussing.

Today, however, I have seen the process through with many of the reports, from the initial National Audit Office report, through the PAC evidence sessions, to the publication of the report and the Treasury response. It helps when we see the whole picture. However, it requires an efficient filing system because it is impossible to retain in one's head the burning issues that we discuss at hearings. If one does not keep a good record in notes, the issues can get lost in the mists of time, because we meet twice a week to consider a most diverse range of subjects—unlike other Select Committees, which, as the hon. Member for Gainsborough (Mr. Leigh) said, home in on a specific aspect of a particular Department and spend several weeks delving into minute detail.

We, on the other hand, fly at 30,000 ft, twice a week diving down and swooping back up to move to the next Department and the next subject. Although that approach means that we cover much ground, it sometimes feels a bit superficial. I am pleased that, in the past year, we have spent some deliberative time outside hearings, trying to pull together some common themes. I should like us to do more of that.

Our most recent session, when we reviewed the work programme of the National Audit Office for the next couple of years with Sir John Bourn, was most valuable. Our work is a partnership with the NAO. I particularly welcome the new appendix to that report, which looked at the risk factors involved in the various areas that the NAO was considering.

It is easy for us to get on our hobby horses when deciding what issues we shall hold hearings on. We all have our pet projects and our pet Departments. However, our time is limited, and we should prioritise our hearings to cover the areas of highest risk. Time and again, we criticise Departments for not taking a risk-based approach, so it is only right that we too should take such an approach to our work.

While reviewing our work over the past six months, I should like to pay tribute to the Chair of our Committee, the hon. Member for Gainsborough, who has, as ever, been assiduous, courteous and charming in his chairmanship. I would also like to thank Nick Wright for his invaluable help as our Committee Clerk, and all the staff at the NAO.

We have a wealth of reports before us today demonstrating the sheer scope of our work, which reaches into every Department, enabling us to fulfil our function of ensuring that the taxpayer is getting value for money, exposing weaknesses and recommending improvements in the process—but of course not the policy—of government. As a member of the party that is in government, I see my role as that of a critical friend. I of course believe that the policy is right; I therefore have a vested interest in making sure that it is delivered effectively. Because of that, I want to focus on two reports today. The first is the 17th report, "Achieving value for money in the delivery of public services", from which I want to pick up on the theme of complexity, and move on to the 36th report, entitled "Tackling the complexity of the benefits system".

Before I home in on those reports, however, I want to say a few words about the Committee's visit to Washington and Boston earlier this year. Once again, I must thank the Committee staff, particularly Nick Wright and Christine Randall, who accompanied us and made sure that we were all in the right place at the right time, even the hon. Member for South Norfolk (Mr. Bacon), who usually managed to be last. It was interesting to see the different approach taken to financial oversight there. In many ways, that reflected the different structure of a separately elected President and his Executive, who can be in conflict with the separately elected Congress. That is all very different from our parliamentary system, in which the Executive derive their power from their majority in Parliament.

It would not be easy to replicate the financial scrutiny and overview of the American system, but like the hon. Member for Gainsborough, I certainly came away thinking that there could be improvements in the way in which Parliament undertakes financial scrutiny of future expenditure plans. I am looking forward to the responses from the Liaison Committee, the Modernisation Committee and the Public Accounts Commission to the proposals put forward by our Chair for departmental Select Committees to devote more time to the scrutiny of expenditure plans.

I shall move on to the two reports on which I want to focus today. The 17th report, "Achieving value for money in the delivery of public services", is fundamental to our work in the Public Accounts Committee. Incidentally, I believe that the report that was published today is also fundamental, but I understand that it is outside the scope of the motion, so I shall not refer to it. The 17th report is an example of how we have consciously stepped outside our role of diving in from 30,000 ft and tried to draw together wider themes over a 10-year period. We deliberately chose a 10-year period so that the report would straddle different Governments and phases of government.

One of the encouraging things to come out of the report is that the great majority of the Committee's recommendations over the years have been acted on. Despite that, however, it is disappointing to note that lessons do not seem to have been learned across other Departments, as the same themes come through in different reports. Seven factors have been identified as needing greater progress, but I shall concentrate on just three: the lack of adequate project management; the fact that there are not enough pilot schemes prior to implementation; and the need to reduce complexity and bureaucracy.

In our last debate in January, I drew attention to the importance of project management, particularly in regard to Ministry of Defence major projects. That is reinforced in this report, which highlights the MOD support vehicle projects, in which the Department decided to proceed without a formal assessment phase, resulting in a slippage of 19 months. This was not because the Department lacked a proper procedure. The smart acquisition procedures were in place; they were simply not acted on.

There is an example in the report from my own constituency. The Home Office had allocated funding to the Portsmouth Partnership for a CCTV and automatic number plate recognition system in December 2002, but required the funds to be spent by the year's end. The subsequent rushed procurement and lack of testing meant that the new systems were not operational until August 2003. There needs to be recognition at departmental level of the practicalities involved in implementing recommendations on the ground.

When we look at pilot projects we see in many reports that either they have not been used or, if they have been used, lessons have not been learned from them. Pilot schemes are crucial for picking up practical issues that may not be apparent in the design stage, but they are of no use if the results are ignored.

John Pugh (Liberal Democrat, Southport)

The hon. Lady is being a little unkind to the Government. Why, only today, they have decided on a pilot scheme for home information packs, rather than going ahead with the real thing! Is that not learning a lesson?

Sarah McCarthy-Fry (Labour, Portsmouth North)

I quite agree that there are instances of pilot projects working well. There is an example in one of our reports of good practice in the Treasury building project, demonstrating how advance planning can reduce risk. I am saying that there have been instances where pilot projects have not worked very well or where lessons have not been learned. If we look at the potential schemes for individual learning accounts in the Department for Education and Skills, we see that during the pilot stage none of the schemes worked, so a completely different scheme was implemented which had no testing at all and was rushed through, resulting in a system prone to fraud which cost the taxpayer about £67 million.

Moving on to reducing complexity and bureaucracy, we come up against an inevitable tension between the Government policy of targeting public money at those most in need and the inevitable complexity that that brings. Sometimes the complexity and bureaucracy go beyond that tension, and our report highlights the South East England Development Agency in my region, where there were more than 40 different funding streams, each with separate monitoring and evaluation criteria. That led to SEEDA having to set up a brand new initiative just to help applicants wade through the process.

Our 36th report focused on complexity in the benefits system. As I said, complexity is inevitable when one targets benefits as well as preventing fraud and abuse and making sure that public money goes where it is most needed. The immediate response is, "We must simplify things," but as our report points out, simplification is not an easy option, and it means a trade-off with affordability, fairness and targeting. That is not to say that there is not much more that can be done.

Let us consider the letters sent out by the DWP. Our report highlighted the difficulties that people have had with written communications, as well as the fact that nothing has improved much over the past six years. I am sure that I am not alone in having constituents at my advice centre who have struggled through the complexity of applying for the benefits to which they are entitled, only, when they get those benefits, to receive letters that they simply do not understand.

Sadiq Khan (Labour, Tooting)

Was my hon. Friend surprised by the evidence that we received that potential recipients of benefits which other Departments were implementing would not receive that advice because it was a DWP project, rather than taking a holistic approach, with people attending advice sessions at which they could receive advice from different Departments, which seems the obvious thing to do?

Sarah McCarthy-Fry (Labour, Portsmouth North)

I entirely agree, and that need for a holistic approach came through in the briefings that we received from Citizens Advice and the Child Poverty Action Group.

Greg Clark (Conservative, Tunbridge Wells)

I agree with the hon. Lady that the complexity of the benefits system is to a certain extent inevitable if there is targeting, but one of the consequences is that organisations such as Citizens Advice have a great increase in their work load. Does she agree that it would be reasonable, in introducing changes to the benefits system, to give some resource to the Citizens Advice to enable it to cope with the inevitable increase in its work load?

Sarah McCarthy-Fry (Labour, Portsmouth North)

I know from when I was a councillor that citizens advice bureaux get considerable resources through service level agreements with local authorities. They do a tremendous amount of work. We should take note when Citizens Advice tells us of the problems that it has. In 2003-04, citizens advice bureaux dealt with 1.3 million cases relating to benefits and tax credits. Citizens Advice acknowledges that some progress has been made, but says that it is still seeing too many people who are missing out on the money to which they are entitled.

Similarly, the Child Poverty Action Group acknowledges the inherent complexity in targeting benefits, but points out that it is made worse by poor delivery, which the Department can do something about. In our report we highlight the importance of highly skilled, trained staff, and at our hearing I asked the permanent secretary why a human being could not review the computer-generated letters that went out and, if necessary, write an explanation on the bottom in plain English. If a letter lists all the benefits to which one could be entitled, but it actually means that one is not going to get any money, it would be a lot easier to understand if that were written on the bottom.

Of course, the use of IT, telephone and other communication technologies will aid simplification. We must be aware, however, that some people will always need face-to-face advice, and we must make sure that our staff have adequate training to do that.

Greg Clark (Conservative, Tunbridge Wells)

Given the importance of preserving that human face, does the hon. Lady share my concern that the savings proposed from front-line staff at the Benefits Agency should not go too far too quickly? We should not throw people on the mercy of a complex computer system without a sufficient number of staff to guide them through that complexity.

Sarah McCarthy-Fry (Labour, Portsmouth North)

It is important that we make sure that the IT systems are in place first, but I would be the last to say that we should not make savings and process benefits more efficiently. We must, however, put the user at the forefront. Efficiency savings and simplification must be delivered for the benefit of the user, and not necessarily for the benefit of the Department. The user must come first. Claimants and applicants must get the benefits of the simplification.

The most important outcome of the inquiry into the complexity of benefits is the setting up of the simplification team, which will develop the simplification strategy and then be able to challenge all new policy proposals on the grounds of complexity. At our hearing, I was encouraged when the permanent secretary said that he hoped to come back in one year and show a demonstrable difference in the level of complexity. I was dubious, however, about how that would be possible, when a clear set of performance indicators had not yet been devised. I was not quite sure how that improvement would be demonstrated. Sadly that was borne out in the Treasury response:

"Because of the difficulties with developing such a measure, the Department cannot commit at this stage to producing one by 2007".

However, I am pleased that the Department nevertheless undertakes to keep the Committee informed of progress.

Measurement of progress brings me back to our visit to the USA. For me, one of the highlights of the trip was our visit to Harvard Business School and our opportunity to debate with four of its professors. It was a huge privilege to listen to them. I was especially interested in the concept of the value chain in delivering public services and how, all too often, we are focused just on inputs, activities and outputs, and we forget the next two items in the value chain—outcomes and impacts. I have no problem with targets. I come from an industry background where total quality management was the norm, and one of the first lessons in any quality system, whether Six Sigma, TQM or whatever is fashionable at the time, is that one must be able to measure.

One must have a mechanism to show whether one is meeting one's defined standards. Delivering public services, however, is not the same as manufacturing widgets, and our standard must be more than just the measuring of inputs, activities and outputs. We must also have a means of assessing outcomes and impacts. The difficulty arises because those are often long-term outcomes and impacts, and the Government are under pressure to find ways in which to demonstrate progress quickly.

Yesterday, I visited my out-of-hours GP service, which had failed on a measurement criterion to get overnight reports to the relevant GP by 8 am the next day. One might say that that was fair enough, but the fact that it had extended its service until 8 am and could not get reports to GPs by 8 am because patients were still being treated at that time had not been taken into account. Yes, it had failed on the raw output target, but it was delivering a better outcome.

That brings me back to those Harvard professors. One concluded with a quote from Nietzsche:

"The most common form of human stupidity is forgetting what we are trying to accomplish".

As members of the PAC, we should keep in mind what we are trying to accomplish. I hope that we will consider outcomes and impacts as well as inputs, activities and outputs when we scrutinise the cost-effectiveness of Government policy.

Richard Bacon (Conservative, South Norfolk)

It is a great pleasure to take part in the debate and to follow the hon. Member for Portsmouth, North (Sarah McCarthy-Fry). I, too, greatly enjoyed the visit to Harvard Business School and would commend it to anyone. I hope that before long the Government also go there and listen to the professors.

My hon. Friend the Member for Gainsborough (Mr. Leigh) referred to my role in the exposure of the foreign national prisoners scandal. I do not propose to say anything about that in this debate, but merely to make one comment about the former Home Secretary, the right hon. Member for Norwich, South (Mr. Clarke). I consciously and deliberately did not call for his resignation over that matter, and I was sorry to see him go. Some may say that his departure became inevitable, but I continue to have a high regard for him and I think that what has happened in the Home Office since then demonstrates that the problems go much deeper than the issue of one Cabinet Minister. I pay tribute to the right hon. Gentleman for the work that he did during his time at the Home Office. "Oops, sorry, I did not mean to destroy your Cabinet career," is not necessarily the most welcome thing to hear from a parliamentary opponent, and that was not my intention. I can only repeat that I have a high regard for the right hon. Gentleman, and I hope that he will continue to make a contribution in this place.

Nevertheless, as was pointed out by my hon. Friend the Member for Gainsborough, there is a serious problem with the Home Office that goes well beyond one issue connected with the immigration and nationality directorate. My hon. Friend said that the Home Office had been unable to present a set of audited accounts to Parliament. There have been the most serious problems possible with the Home Office accounts. They were flagged up in a memorandum from the National Audit Office to the audit committee of the Home Office, entitled "Home Office Resource Accounts 2004-05 Audit Update from the National Audit Office".

I pay tribute to Mr. Darren Box, financial audit director at the National Audit Office, whose persistence caused the seriousness of the problems to come to light. His memorandum to the audit committee states

"At this stage we are contemplating a disclaimer opinion on the accounts on the grounds that fundamental control failures mean that we are unable to form an opinion on whether the accounts are true and fair and whether expenditure recorded in them is regular."

The memo continues:

"The accounts display a very limited understanding of how different figures within financial statements relate to one another indicating skills and experience deficits within Accounts Branch.

The accounts showed little evidence of meaningful management review at any level.

With the notable exception of IND, there is no evidence of the accounts production process being subject to any proper project management disciplines.

Issues raised in our previous management letters have not been actioned and appear not to have been disseminated to relevant staff".

Later, under the heading "Control Weaknesses", the memo states:

"In addition to late and poor quality financial statements, serious control weaknesses have also been identified during the audit. The weaknesses include:

IT Controls: There is a lack of security within key IT applications through the absence of unique identification for system administrators, no audit trails, weaknesses in control over standing data"

and so forth.

The memo adds:

"Bank reconciliations are the most fundamental of all accounting controls as they enable payment, receipts and cash balances to be validated to an external source and provide assurance about debtor and creditor balances. Due to difficulties in implementing the Adelphi accounting system, the Home Office has been unable to reconcile its cash at bank position".

That bears repetition—the Home Office has been unable to reconcile its cash at bank position.

Bank reconciliations are fundamental. They are an essential control over cash to ensure that income and payments recorded in any organisation's bank account match its accounting records. Matching also provides assurance about debtor and creditor balances—in other words, amounts owed to and by a Department—and can help to prevent and detect fraud and error. What was worse was that the Home Office had not even realised that failure to reconcile cash fully could ultimately undermine its ability to provide Parliament with fully audited accounts.

The memo goes into further detail about the Adelphi accounting system, stating:

"A further cause for concern has arisen from our review of Adelphi transaction data. It took six months for the Home Office to supply us with transaction data that we were able to reconcile successfully to the Adelphi general ledger. However, when the gross transaction value of debits and credits within this data was totalled, they each amounted to some £26,527,108,436,994, almost 2,000 times higher than the Home Office's gross expenditure for 2004-05 and approximately one and a half times higher than the estimated GDP of the entire planet. This suggests that something has gone seriously awry...We have yet to receive an explanation for what has happened... Collectively, these control weaknesses expose the Home Office to a high risk of fraud, irregularity, poor value for money and waste in its financial operations."

David Taylor (Labour, North West Leicestershire)

Given that the Home Office is feeling its way through this incoherent and inaccurate maze of figures that underpin its performance and direction, can the hon. Gentleman suggest why it is so certain that savings that are available under contestability and outsourcing are sufficient to apply those two techniques on a grand scale to the National Offender Management Service?

Richard Bacon (Conservative, South Norfolk)

I do not think that I can. Many of the so-called savings to be found under various aspects of Government efficiency programmes—had we been in office, they would probably have been found under the James committee savings—are very questionable. A different example, with which the Financial Secretary will be only too familiar, is that Her Majesty's Revenue and Customs is busy sacking fraud staff, who were bringing in many hundreds of times their own salary in some cases, in order to meet rather spurious targets. However, I will not dwell on that.

The result of all that activity was that the Comptroller and Auditor General, Sir John Bourn, was unable to reach an opinion on the truth and fairness of the Home Office accounts for 2004-05, so he disclaimed an audit opinion. It is worth explaining what disclaiming means. A disclaimer is not the same as a qualified opinion. We are familiar with the idea of qualified opinions—for example, because of concerns about fraud and error, there has been a qualified opinion on the Department for Work and Pensions' accounts since 1988, which specifies the particular aspects, such as housing benefit fraud, income support fraud or whatever, that are the subject of concern. The same happens with the European Court of Auditors in respect of EU accounts. However, that is not what I am talking about. This is Sir John Bourn, an Officer of the House, telling Parliament that he has no information at all with which to form a view. The accounts were presented to Parliament unaudited.

Irrespective of whether we are talking about a public or a private sector organisation, that is an almost unbelievable state of affairs. It is hard to imagine any private sector organisation—whether it be a golf club or a multinational corporation—for which that would fail to lead to enormous consequences. The Home Office cannot say with any certainty how much it spent during the year, what debts it was owed and what it owed to others or what assets it owns. There is no assurance that all expenditure incurred during the year was in line with what Parliament authorised and financial information provided by the Home Office is unreliable. Those are the most basic failures of financial stewardship and control by the accounting officer who is legally responsible to Parliament to account for how moneys are spent.

In that case, the accounting officer failed in his duty to Parliament and one might have thought that the person responsible would have been hauled over the coals, exposed and brought to the Bar of the House to explain himself. What actually happened, however, was that he was promoted to become Deputy Governor of the Bank of England in charge of financial stability in the banking system, which, if nothing else, at least shows that the people who run the country still have a sense of humour.

What I would like to know is where the Treasury is in all that. The NAO memo goes on to state that

"late qualified accounts are extremely damaging to the Home Office's reputation, particularly with the Treasury who are likely to exercise closer scrutiny over the unaudited resource budget outturn submitted to them each summer."

What assurances can the Financial Secretary give us about the Home Office's use of public money? Is the Treasury now keeping a close eye on what happens? What supervision regime is now in place? Is there now a Treasury hit squad inside the Home Office helping to sort things out? How often does the Home Office have to report in and tell the Treasury what it is doing? It has been a disgraceful episode and I hope that it is soon sorted out.

I come to the national programme for information technology in the health service. I do so with some trepidation because I see that the hon. Member for Glasgow, South-West (Mr. Davidson) is in his place. The last time I made a speech on this subject—it was some years ago, I can reassure him—he said that he was glad that there were anoraks in this place who were prepared to devote so much attention to such areas and that he was very glad that he was not one of them. I have to say that the problems have not gone away; if anything, they have become worse. The scale of the national programme is simply huge. As the NAO described it:

"The scope, vision, scale and complexity of the Programme is wider and more extensive than any ongoing or planned healthcare IT development programme in the world."

It started with the beguiling idea that information technology offered enormous potential benefits for the NHS. Above all, patient records could follow the patient smoothly and quickly around the system, bookings could be made online, and doctors could consult records easily in their surgeries and during their rounds. Managers and clinicians could track and report on the work of hospitals and trusts, on the prevalence of clinical conditions and on the success of the health service in treating them. IT in the NHS seemed to offer nothing short of a revolution. However, the problem was that the revolution appeared to be outside the Government's control. System standards were being set at the centre, as they should be, but system procurement was happening at a local and trust level.

Kitty Ussher (Labour, Burnley)

The hon. Gentleman mentioned procurement. Will he join me in congratulating the Department of Health on having secured the cheapest ever deal with Microsoft across the whole world?

Richard Bacon (Conservative, South Norfolk)

The hon. Lady may recall that Sir Peter Gershon, when he was at the Office of Government Commerce, negotiated a deal with Microsoft that saved the taxpayer £120 million. As the hon. Member for Livingston (Mr. Devine) said earlier, there have been serious problems with the public sector failing to exercise the procurement power that it has, and I welcome any steps towards improving procurement and using the purchasing power that is available.

In relation to the national programme—in which Microsoft is not involved, by the way—the system standards have been set at the centre, but procurement has happened locally. The whole process must have seemed terribly slow to those who wanted to make things happen more quickly. That was why, some years ago, the Prime Minister called to a seminar the heads of some of the world's largest IT companies. They told him that there was no problem and that they could design, deliver and install national systems across the entire NHS that would do everything that the most optimistic advocate of health IT could want. Of course, they said it would not be cheap and they quoted a figure of £2.3 billion, but, as the Prime Minister said, up to 600 million pieces of paper would be saved a year.

Thus the national programme for IT in the health service was born and with it a new bureaucracy, Connecting for Health. Promises were made, headlines garnered and giant regional contracts were duly let. However, five years on, where are we? For one thing, the cost of the whole programme has inflated enormously. By 2003-04, £6.2 billion worth of contracts had been placed and, in evidence to the PAC, the director general of IT in the health service, Mr. Richard Granger, told us that the figure is now £12.4 billion. The Minister of State for Health has said that the figure is closer to £20 billion, although there is some dispute about what he is including in that. In any event, those are huge numbers.

David Taylor (Labour, North West Leicestershire)

Even taking the mean of those projected figures, it suggests an overspend of £12.5 billion, which would fund in total the trust deficits that the NHS is experiencing for more than 20 years, which would take us moderately close to the next Conservative Government.

Richard Bacon (Conservative, South Norfolk)

The hon. Gentleman ends on a very optimistic note, and I join him in that. The fact is that the numbers, as well as being very large, have been very varied. We have heard £2.3 billion; £6.2 billion; £6.8 billion; £1.9 billion of central costs, making a total of £8.7 billion; £3.4 billion of central costs making £12.4 billion; £20 billion; and three to five times central contract costs, which could push the figure to more than £30 billion. The fact that the figures are so vague and varied is part of the problem. The potential opportunity cost is also enormous, as the hon. Gentleman points out.

John Pugh (Liberal Democrat, Southport)

Apart from the central cost, there is the serious issue of what the programme will cost individual trusts and PCTs. No one will put a figure on that.

Richard Bacon (Conservative, South Norfolk)

The National Audit Office put a figure of £3.4 billion on it, although how much that takes into account the full costs is a moot point. One has only to read the board papers of trusts around the country to see IT directors saying that they are incurring costs that they cannot recover, in many cases including costs that they incurred through the old information for health programme that was stopped when the national programme for IT in the health service was started and costs incurred on legacy systems. No matter exactly what the sum is, it is definitely big. One could say that cost overruns are nothing new; they are regrettable and to be avoided, but they happen. However, surely in return for that vast forecast expenditure we would now expect to be on the way towards a world-beating IT system.

Kitty Ussher (Labour, Burnley)

Will the hon. Gentleman explain where, within the scope of the motion that we debating this evening, the report on IT in the NHS lies?

Richard Bacon (Conservative, South Norfolk)

As the hon. Lady will know, we have looked at the national programme for IT in the health service a number of times during the last few years and I dare say that there will be future reports. In fact, the National Audit Office has said there will be other reports on it further down the line. It is a matter of enormous importance to taxpayers and, I am sure, to all members of the Committee.

One of the suggestions that has been made by Connecting for Health is that 750,000 prescriptions have been issued by using the electronic prescribing service. One of the slightly alarming facts is that only 1.5 per cent. of those were received electronically by pharmacies and hence dispensed. The rest of them—some 740,000—simply vanished into the ether, never to be seen or heard of again. The thought of thousands of NHS staff typing pointlessly away is a combination of industry and futility that I find rather depressing to contemplate. The reason for that state of affairs is that, where systems were put in place in GP surgeries, the corresponding systems were not put in place in pharmacies, and sometimes vice versa. That is a relatively small example of some of the problems. There are many others.

Perhaps the most important and difficult component of the national programme is the delivery of patient administration and clinical systems into acute hospital trusts. We should by now have 110 acute hospitals with patient administration and clinical systems in place. The actual number is just 12. Of those 12, how many are clinical systems? The answer is none. Not a single hospital-wide clinical system has been delivered under the national programme.

The choose and book system should allow patients to book appointments with doctors electronically. Almost half of all GP referrals—some 8.5 million a year—are supposed to be made under that system by September 2007, but so far we have only 300,000 bookings. The number of bookings can be found on the Connecting for Health website. What is not on the website, but is true, is that by the Department of Health's own estimate, only about one quarter of the bookings that have been achieved were made truly electronically; the remaining three quarters were made by telephone.

One redeeming feature in this rather grim scene is that most of the forecast cost of the national programme has yet to be spent. So far, total expenditure is about £1.5 billion. That figure of actual expenditure so far was confirmed to the Committee by the director general of IT in the health service. Although £1.5 billion is admittedly rather more than the £654 million referred to in the National Audit Office report, it leaves us wondering what sort of organisation can run up almost £850 million of central administration costs before it has even achieved its main aims. However, it remains true that many billions of pounds have yet to be spent, so it may not be too late to turn back from the road that we are currently on.

That is a crucial point. It is easy to think of NHS IT as a complex and enormously expensive abstraction—as a subject for techies and computer journalists, but not for politicians or the national media. In fact, good IT systems offer enormous benefits to patients and bad ones cause them direct harm. The national programme is therefore an issue of great importance. The US firm Cerner, and its partner Fujitsu, have the regional contracts covering the south of England under the programme. It has recently been reported that Cerner is also to enter into a contract with BT to deliver systems in London after problems with another US software supplier, IDX. The Nuffield orthopaedic centre in Oxford is the only trust under the national programme now using the patient administration system offered by Cerner. I have been shown a board paper from the trust, which shows that the trust failed to meet its waiting list targets because IT system problems meant that it could not identify which patients were waiting for what treatment. The paper, by the director of nursing and operations for the trust, states:

"the scale of the difficulties and the duration of time that the problems persisted meant that operationally it was impossible to maintain assurance that all patients could be identified to be treated within appropriate timescales."

In fact, the standard of the patient information produced by the software system was so low that all the information had to be checked and corrected manually. In other words, the trust and its patients would have been better off with no electronic system at all.

In Birmingham children's hospital, the patient administration system was provided by the troubled UK firm iSOFT. A series of problems in Birmingham culminated in the trust losing 800 children's records in a fortnight. Some of those children turned up for appointments entirely unexpectedly because their records could not be found, while others were presumably not summoned for appointments that they required. To give one more example, the child health system deployed by BT in London lost so many children's records that the number of vaccinations given to children in the primary care trusts that were even in a position to report any statistics went down by 18 per cent.

Volume 16, No. 25 of "CDR Weekly", the Health Protection Agency's journal, stated:

"This is the third quarterly report in which national trends could not be reported due to problems with new child health systems being implemented in London. Comparing the year 2005/6 to 2004/5, the number of children in London who are missing from the COVER programme is nearly 18,000 for children turning 12 months, over 14,500 for children turning 24 months and nearly 19,000 for children turning 5 years of age."

The number of children getting vital vaccinations for measles, mumps, rubella, polio and so on fell by a fifth. The Health Protection Agency commented:

"If new child systems fail to deliver ... then children risk missing out on vaccination. Thus, they remain unprotected and eventually will catch measles, mumps, and rubella infections."

The HPA report continued:

"Falls in coverage of this magnitude not only indicate that individual children may be at risk, but also represent a potential major public health threat to the control of the diseases in the community."

Those are chilling words. It is extraordinary that no clinical systems have been deployed under the national programme. However, on reflection, given the damage that patient administration systems now seem to be doing, perhaps that is just as well. The implications of similar failures in clinical systems hardly bear thinking about.

Finally, I want to deal briefly with the consequences of the crisis in the national programme for IT contractors. Mr. Granger, the programme's director general, is fond of using blood-curdling metaphors when speaking about IT contractors. He intends, he says, to treat them like huskies—when one goes lame, it is shot, cut up and fed to the rest—apparently, that keeps them keen. However, managing a massive IT programme is not like running a dog sled. I believe that that brand of macho management threatens to bring yet more chaos to an already tottering system.

By the end of March this year, the four major contractors—BT, Accenture, Fujitsu and CSC— had received only £250 million in payments on £5 billion-worth of contracts.

However, their spending in what I believe to be a doomed effort to make the fundamentally flawed system work has been massive. Accenture has wisely already set aside £260 million as provision against losses on the contract, but the remaining three companies have remained strangely silent. By the end of March this year—two and a half years in—BT had received just £1.3 million on its contract of £996 million. My best advice indicates that BT has spent more than £200 million trying to get systems up and running. That amount does not yet figure in its annual accounts. I understand that BT intends to replace its existing software supplier with Cerner, fresh from that company's poor performance at Nuffield. However, that means that most, or perhaps all, of BT's work in progress on the existing contract will need to be written off. We have already seen what happened to the software supplier iSOFT, when shareholders—

Michael Martin (Speaker, Glasgow North East)

Order. I am most impressed by the hon. Gentleman's expertise on this subject, but it does not relate to the matter before us. Although there will be other occasions on which he will be able to raise the problems of the NHS, he must get back to the matter in hand.

Richard Bacon (Conservative, South Norfolk)

Thank you for that guidance, Mr. Speaker. I will rapidly draw my remarks to a conclusion and allow other hon. Members to speak.

The national programme for IT in the health service has been covered by the National Audit Office on several occasions, as I am sure it will be in the future. It is the largest civilian IT programme in the world and a matter of great importance. I hope that it is also of great importance to the Treasury and that the Financial Secretary will find time in his winding-up speech to refer to the interest that the Treasury has in the matter, because the amounts involved are so enormous that they could have huge consequences for the Exchequer, fiscal policy and, indeed, the rest of the country.

Helen Goodman (Labour, Bishop Auckland)

It is a pleasure to take part in this debate and, indeed, to serve on the PAC under the benign and good-humoured chairmanship of the hon. Member for Gainsborough (Mr. Leigh). Like him and my hon. Friend the Member for Portsmouth, North (Sarah McCarthy-Fry), I have looked at the 17th report, "Achieving value for money in the delivery of public services", because every member of the PAC wants the Committee to be effective. We want its work to be used and useful; we want to be sure that lessons are learned and are taken into account in decision making.

The 17th report identified seven key aspects of public service delivery that Departments must target to achieve better value for money: planning carefully prior to implementation; strengthening project management; reducing complexity and bureaucracy; raising public service productivity; being more commercially astute; tackling fraud; and better and more timely implementation of policies and programmes. An example of good planning is the benefit payment card, which is successful as 97 per cent. of benefits are paid directly into people's accounts and claimants are pleased with it. Another good example is the turnaround at the passport agency.

Turning to project management, there have been many complex IT schemes. Like the hon. Member for South Norfolk (Mr. Bacon), I am generally not a fan of IT schemes, but we have become better at running them. As for the need to reduce complexity and bureaucracy, the Committee has returned to the benefits system as we need to reduce tiers of bureaucracy and the number of institutions delivering public services. Public service productivity improvements include a better use of accommodation in the NHS and the higher education sector. The role of the Office of Government Commerce is vital if we are to achieve the goal of being more commercially astute, and after the reports were produced we looked at the issue again. There is a great deal to be done to tackle fraud in tax payments, and in its examination of policies that need to be implemented better and in a more timely manner, the 17th report looked at the Eurofighter and the Apache helicopter.

In considering whether the reports are used and are useful, I looked at the document that the Treasury published last Thursday entitled, "Releasing the resources to meet the challenges ahead: value for money in the 2007 Comprehensive Spending Review". I wished to make a judgment about whether the proposal to save 2.5 per cent. and achieve better administration is credible, because last week there was a great deal of scepticism about that objective and many aspersions were cast on it. The Gershon efficiency programme identified five measures to improve efficiency. Inevitably, they are not the same as the measures identified by the NAO, although there is considerable overlap. For example, the NAO and the PAC said that it was important to be more commercially astute, but the Treasury document looked at procurement practices in general. The NAO discussed productivity, but the Treasury document looked at the importance of increasing the ratio of productive time to total time in the public services. The NAO discussed the need to reduce complexity and bureaucracy, but the Treasury document looked at transactional services policy, funding and regulation. In addition, it urged the importance of reducing spending in corporate services. It reported that in recent years, there have been £8 billion-worth of savings as a result of those five measures. However, I am sure that everybody would be more interested in looking forward, so I wanted to see whether examples of the type given in the document issued last week are likely to produce the sort of savings that would result in a 2.5 per cent. saving year on year overall.

On procurement, the examples given are pulling together procurement for several Government Departments and public bodies. For example, the Foreign and Commonwealth Office and the Department for International Development are to collocate many offices. The Department for Transport will promote collaboration between highways authorities on new build and maintenance. The Department for Education and Skills is piloting e-procurement for schools. Lord Carter's review of legal aid will provide a market-based approach which should produce savings of 20 per cent. over the next four years. In addition to these value-for-money considerations, procurement will need to take account of the decisions set out in the energy review and the need for procurement to be compliant with our climate change objectives in the future.

Turning to productive time, the sort of possibilities spelled out are the major changes in the Department for Constitutional Affairs with regard to the running of the court system, and in the Ministry of Defence the merging of the Defence Logistics Organisation with the Defence Procurement Agency. The Lyons review made recommendations on the use of assets, from which should flow significant asset disposals projected to be £30 billion in the period up to 2010. The Department for Communities and Local Government and the Treasury are to improve the release of land for house building. So there are a large number of chunky examples.

The PAC also considered the reduction of complexity and bureaucracy. It is important to see how that is to be carried forward. Examples include reducing the number of funding streams for improving the social housing stock, and rationalising the number of contact centres and local offices in order to share provision across the public sector and reduce duplication through better data sharing.

The PAC concentrated a great deal on the need to reduce fraud. Improvements are being made to the operation of the Driver and Vehicle Licensing Agency to cut evasion of vehicle excise duty. That is projected to save £140 million a year. The court system is changing the administration of fixed penalty notices, which will reduce the scope for defrauding the public purse.

On implementation, which is another of the overlapping themes, the Department of Health is reviewing systemic delivery issues to improve treatment pathways. That will cut the length of patients' hospital stays, which should benefit not just the public purse, but patients.

On the two other factors identified by the PAC in its 17th report, improving planning and improving project management, there is no explicit read-across to the plans for the comprehensive spending review. However, the NAO commented on the importance of strengthening Government Departments' capabilities. That means upskilling staff to raise their capacity to plan and manage complex projects. That is being done partly by upskilling within Departments and partly by strengthening central support and collaboration. For example, the work of the Office of Government Commerce and the introduction of the gateway system, which we have discussed, will no doubt turn out to be important. It could also be said that the process of cross-cutting reviews and zero-based budgeting is part of improving planning and management.

To summarise, when the 17th report by the PAC was published, the Chairman said:

"Given the scale of Government spending just a 2 per cent. improvement in the use of resources could generate savings of £8 billion a year."

In the forthcoming comprehensive spending review, the Government have gone further, identifying scope for saving 2.5 per cent. a year. Looking at the range of measures and policies, that appears to be completely credible. We have come a long way from the Gladstonian approach—or even the 17th century, candle-ends approach. To achieve that saving, it will be necessary to re-engineer processes and utilise the procurement scope of the £125 billion that the Government already spend. But I am sure that that will turn out to be possible, and that as the PAC goes on to do further work we will find further possibilities that the Government will be able to make use of.

David Heath (Liberal Democrat, Somerton and Frome)

May I start by returning to a point that the hon. Member for Gainsborough (Mr. Leigh) made in introducing the debate? This is no time of the evening for a debate of such importance on matters that are so crucial to the efficient governance of the country. The Public Accounts Committee does a very important job. It produces reports that are of enormous value, and they ought to be given proper and timely scrutiny by the House. That is not achieved by a debate such as this in which, with very few exceptions, the participants are Committee members. I notice that Members present include the hon. Members for South Norfolk (Mr. Bacon), for Tunbridge Wells (Greg Clark), for Glasgow, South-West (Mr. Davidson), for Bishop Auckland (Helen Goodman), for Tooting (Mr. Khan), for Portsmouth, North (Sarah McCarthy-Fry) and for Burnley (Kitty Ussher), and my hon. Friend the Member for Southport (Dr. Pugh), as well as the Financial Secretary, who is nominally a member of the Committee, and its Chairman, the hon. Member for Gainsborough. If this debate is only to be an expanded Committee meeting, it fails its primary purpose. I hope that the Government's business managers take note of that and ensure that in future we have a more appropriate setting for the debate.

Richard Bacon (Conservative, South Norfolk)

I completely agree with what the hon. Gentleman has just said. If we have to grind on late into the night, I suppose that it is in the best interests of taxpayers that we do so. But has the hon. Gentleman noticed that the Government's business managers—the Whips—are also Treasury Ministers, and if Ministers on the Treasury Bench are required to stay late this evening, it can only be because of actions of the Treasury itself, and they might think of that in future, before timing a debate in this way?

David Heath (Liberal Democrat, Somerton and Frome)

Let us hope so, but I am not entirely sure that the usual channels work in that way.

Let me pay tribute again to the work of the PAC. Its Chairman used the word "assiduity" in terms of his office. Assiduity is one of those words that nowadays have almost solely a parliamentary usage: no one other than parliamentarians talks of being assiduous, just as no one else talks about being churlish. But it is a relevant word: this Committee is assiduous in its approach to its work, for which we are grateful.

I have never had the pleasure of serving on the PAC, but I did serve on what is perhaps an analogous body before I entered the House. I was an audit commissioner, and I know about the important work that was done by the Audit Commission—the sister body of the National Audit Office—and the importance of our reports in improving the effectiveness and efficiency of local government and the national health service.

The other important point to make is that the PAC's reports are not all about disasters; they are not all about things going wrong. We need to put it on the record that they often point to good practice, and sometimes even excellence, in public services. If we do not recognise that, we give a false perspective of the Committee's work.

Having said that, it is inevitable that we concentrate on those areas where the Government are performing less well. We have heard mention of areas that I do not intend to pursue. The hon. Member for Portsmouth, North mentioned Ministry of Defence procurement; that has been a long-term concern of mine and I still do not think that we get it right. However hard the MOD tries to improve its procurement, it does not get it right, and too often there are some absurdities in procurement procedures, which we can ill afford. Not only do they cost money, they reduce our armed forces' effectiveness and sometimes subjects them to risks that they should not face, simply because of the lack of correctness in procurement procedure.

Nor am I going to go into national health service IT procurement. I assume that the hon. Member for South Norfolk was discussing earlier the 17th report's reference to NHS IT, and that that was why his entire speech was in order. I want to echo some of the concerns that he expressed by pointing out that when I met my local medical committee of general practitioners in Somerset last week, top of their agenda was their concern about the NHS IT contract's effect on their practices. We in this House should be aware of that issue.

I do want to mention the Home Office, and I share many of the concerns that have already been expressed. The 34th report, on returning failed asylum applicants, was the first crack that caused the entire edifice to collapse, and not before time. The Home Office has been underperforming in management, service delivery and, as we have already heard, accountancy procedures for far too long. The hon. Member for Portsmouth, North mentioned how often pilot schemes were progressed without assessing the results. No Department is more guilty of that than the Home Office, which is forever starting pilot schemes and rolling out the relevant programmes across the country—sometimes with disastrous results—before the schemes have even run their course, let alone before the evidence has been assessed. We see that in legislation, as well; sometimes, legislation is amended before it has even come into force. That is not the right way to run a Department of such importance to the country, and I do hope that the new Home Secretary is getting to grips with it, but I fear that the early signs are not good. We must wait to see what happens in the days and months to come.

I turn to a perhaps less obvious report—the 40th, on efficiency in water resource management in the Environment Agency. I have a particular and personal interest in water resource management, as I live in a village where we have been given notice of discontinuation of our water supply by the Duke of Somerset. I want to stress the huge strains that are being put on the Environment Agency, a body for which I have a great deal of time, and which does absolutely essential work. My contention is that the increasing costs of flood management are preventing it from doing a lot of the other work in mitigation of environmental damage that it ought to be doing. In particular, it is unable to provide the level of resources for environmental protection that it should. I hope that the Committee will return to that issue and the question of the distribution of resources. It made the point in the 40th report that there was a blurring of the resources applied to water resource management and to flood defence. In fact, that is a wider problem within the Environment Agency, and, because I want it to do the best possible job, and because I know the demands being put on its limited resources, it is worth exploring further.

I turn to one other use of the Environment Agency's resources that came to my notice a few days ago. A couple of websites belonging to the agency—or, more accurately, to the "Asiantaeth yr Amgylchedd Cymru", which is the Environment Agency Wales—have devoted an entire page to the

"Nentydd Mells, Whatney a Nunney",

and the

"Somerset Frome yn Whitam Friary a Frome."

Being translated, that is the Mells stream in Whatley and Nunney and the River Frome in Witham Friary, my home village, in my constituency. In none of those three villages do we have a monoglot Welsh speaker, and I am not entirely sure that it is a proper use of resources to use translating facilities to provide individual websites for flood defence and flood protection information in Welsh for my Somerset villages.

I know that we are quite near to Wales. I suppose that we are a Marcher county. I strongly support the view that there should be Welsh information for Welsh people in Wales. However, I do not believe that it is a sensible use of resources to provide information in Welsh about flood levels in villages in Somerset, because we find it difficult to assimilate that information. The Committee might like to consider that. Perhaps the issue should have been incorporated in the report "Lost in translation?" which was actually on an entirely different subject.

Lastly, I will deal with tax credit fraud. It is an inevitable area of concern. Exactly a year ago today, when the Committee issued its fourth report, it was slightly optimistic about fraud. It reported:

"The Department has made good progress in reducing losses from fraud and error".

Unfortunately, the Department in question was the Department for Work and Pensions; the tax credit system is operated by the Treasury through Her Majesty's Revenue and Customs. We have the 37th report, on the Inland Revenue, and I see within it a great deal of concern expressed.

We had the original estimate of £460 million of fraud in the tax credit system. We know that that has now increased to about £1.28 billion in the first year. We know also that the signs are that in the second year of operation the figure will be as high again. Further, we know that £131 million of taxpayers' money has been lost to organised fraud—to gangs working in collaboration, it would appear, with civil servants, although that is yet to be established, to defraud the Exchequer. In addition, we know that in the third year of operation the overpayment of tax credits—a point made by the Chairman of the Committee—is likely to be about £1.8 billion. So many unhappy people have been given money which they unwittingly received, not knowing that they were not entitled to it, and have suffered the consequences of having that clawed back. Sometimes that has caused great hardship to families, because the money was inevitably spent on children's clothes, Christmas presents or whatever was required in the household.

In the first three years of tax credits, £5.8 billion has been overspent and £2.4 billion has been lost in fraud. There is at least a strong suspicion that this was known to the Department back in 2004, and yet the ePortal, which is thought to be the main occasion for fraud, was not closed until December 2005.

There is still a sense of denial on the part of the Treasury about these facts. There is concern that it has not come to grips with its underperformance in dealing with the matter. Yet £1 in every £10 in this system is lost through error and fraud. That being so, I think that we are entitled to ask why better and more stringent action was not taken at any early stage. When the Comptroller and Auditor General has to qualify the accounts of Her Majesty's Revenue and Customs year after year, of all the Departments in the panoply of the state, there are serious questions to be asked.

I close by taking up a point that the Chairman of the Committee may have raised slightly out of order, in that it was referred to in a report that was published only today and is not part of our consideration. I will follow the hon. Gentleman's lead by at least mentioning what he said. He used the phrase, "Getting it right the first time". That is a key part of delivering good public services. Time and again in our constituencies we as individual Members see examples of the inability of public services to get it right first time, occasioning people to come to our advice surgeries or write us letters that require us to write letters on House of Commons notepaper, and miraculously what was not right the first time is then sorted, because a Member of Parliament has written to the chief executive of the agency concerned and that then descends through the bureaucracy like a brick until it hits some poor unfortunate who then has to recalculate the figures and get it right. It should not be like that. People should have the expectation and right that Government Departments will make the calculation to get it right first time. Until we have systems that make sure that that is the case, we are failing our citizens.

Yet again I congratulate the Public Accounts Committee on all its work in highlighting cases where the Government Departments do not get it right, in the hope and expectation that improvement will come. I hope that I am as optimistic as the hon. Member for Bishop Auckland (Helen Goodman). I am not sure that I am. She sees a bright new future for Government as a result of the reports. I hope that that is the case because it is in all our interests that it is the case. I express a little cynicism and a little pessimism, but let us hope that there is at least some incremental improvement, and that the PAC has helped that process.

Sadiq Khan (Labour, Tooting)

I begin as other colleagues have ended, by paying tribute to Nick Wright, Chris Randall, Emma Sawyer and Ronnie Jefferson, who run the Committee's office so efficiently, and also to the Comptroller and Auditor General, Sir John Bourn, and his team at the NAO, who really are top drawer. I note the time, so I will focus primarily on two particular reports in the motion, the 22nd and the 37th reports, that may not otherwise receive the attention that I believe they deserve.

Last time we discussed a PAC report, in January 2006, the Financial Secretary described our work as a tour de force. However, it is not just the Financial Secretary or the Treasury who take an interest in our reports. It is not even the "Today" programme— which cherry-picks and selects the most outrageously critical comments of the Chairman against the Government— which has an interest in the work that we do. What is remarkable is how non-governmental organisations, pressure groups, constituents and other Departments take an interest in our work, and the work that we do provides an opening or a springboard for things that they can do.

The 22nd report was one such report. The Chairman of the PAC talked about the impact on the end user, and the 22nd report is a good example. That report was on the subject of maintaining and improving Britain's railway stations. As all constituents in Tooting will know, I have been campaigning for improvements in Earlsfield station in my constituency for some time now. At the beginning of this month, a help point was installed, which enables disabled passengers to utilise a free taxi service that willtake them to an accessible station. This followed confirmation that I received at the Committee meeting on 12 October that the Association of Train Operating Companies would be investing £600,000 to improve such facilities across the network, and train operating companies such as South West Trains have followed that lead.

However, in its report the Committee highlighted the fact that more than half of the country's stations are not fully accessible to the disabled. That led me to table early-day motion 911, which 141 colleagues have signed, although one or two Committee members still have not done so, and I highly recommend them to do so. The situation highlighted by our Committee and by the early-day motion is clearly unacceptable. Therefore, as I said earlier, I welcome the Department for Transport's commitment to invest £370 million over the next decade to address the deficiencies that we raised, which are in breach of the Disability Discrimination Act 1995.

I was disappointed that Earlsfield was not included in the 47 stations initially chosen for the study, but I am pleased about the objectives outlined in the railways for all strategy. Once again, I would like the Committee to take some of the credit for the conclusions that that strategy reached. It called for improvements to be made in a shorter time frame, and our report highlighted the fact that insufficient attention had been paid to the quality of stations. Now that the Department for Transport is responsible for stations strategy, I hope that it will respond accordingly to that recommendation.

Station security is another important area that the Committee investigated, and I note that my hon. Friend the Member for Brent, South (Ms Butler) will hand in a petition tomorrow highlighting concerns that we first raised in our Committee. Balham station in my constituency particularly concerned me, and I raised the matter in Committee, because there appeared to be complacency about passenger security. Our Committee highlighted the point that few train operating companies had joined national schemes to improve security and reduce crime.

The report cited the three most reassuring facilities for passengers—the presence of staff, effective lighting and closed circuit television. I acknowledge that the Treasury has contended that improvements to personal safety will increase train usage only by approximately 2 per cent., as opposed to the 11 per cent. figure quoted in the report, but that does not reduce the significance of safer stations, and I am sure that I speak for hon. Members on both sides of the House when I say that the safety and security of our constituents is of paramount importance.

The report also confirmed that the original franchise agreements failed to place suitable emphasis on the improvement of facilities. I therefore welcome the Government's increased expectations regarding station security within future franchise agreements. Investment in British Transport police increased by 24 per cent. in the past year, as the issue began to receive the necessary recognition.

The Committee also highlighted the complicated and inflexible procedures employed by Network Rail, which many see as an obstacle in the path of improvement to station services. The majority of our stations around the country are more than 100 years old, and approximately 15 per cent. of them are listed buildings. Moreover, as I learned at first hand, too many organisations are responsible for station maintenance. I understand that work is under way on a new stations code to establish more effective contractual arrangements, and I believe that that is essential if stations are to make progress on maintenance, security and facilities.

The hon. Member for Somerton and Frome (Mr. Heath) has mentioned the Committee's 37th report, "Inland Revenue Standard Report: New Tax Credits", and my hon. Friend the Member for Portsmouth, North (Sarah McCarthy-Fry) has mentioned the 36th report, which is connected to it. When we questioned the chairman of HM Revenue and Customs on 14 December in Committee, I established that tax credits had the highest take-up of any benefit delivered through a credit system. Tax credits benefit at least 3,600 families in my constituency and a total of 6.1 million families nationwide, which include 10 million children. I understand from the evidence that we heard and from the excellent questions that I asked—

Ian Davidson (Labour, Glasgow South West)

You did.

Sadiq Khan (Labour, Tooting)

From a sedentary position, my hon. Friend has complimented my questioning, and I thank him for the compliment.

Kitty Ussher (Labour, Burnley)

So do I.

Sadiq Khan (Labour, Tooting)

Another hon. Friend has also complimented me.

I understand that the take-up rate is particularly high among low-income families, at 93 per cent. compared with only 47 per cent. for the old working families tax credit. I welcome the commitment by the Government, the Treasury and HMRC to improve the efficiency of tax credit administration. The problems associated with overpayments highlighted in the report have prevented that laudable scheme from receiving the praise that it certainly deserves. Overpayments are inherent in the system, because of the provisional nature of the awards. I have been assured that HMRC is confident that the changes implemented by the Government, which are outlined in the report, will ensure that overpayments are significantly reduced. The disregard for income increases has been raised from £2,500 to £25,000, and claimants must advise HMRC of changes in their circumstances within one month.

The report also raised concerns about error and fraud. The hon. Member for Somerton and Frome has touched on those concerns, and I will not rehearse his points.

David Heath (Liberal Democrat, Somerton and Frome)

I sincerely hope that HMRC is coming to terms with improving the system to prevent fraud. However, some constituents have told it several times about changes of circumstance, but nothing has happened—it is as though the letters have disappeared into the ether—which means that they are still overpaid, despite having done everything that they can to notify it. Is that not a cause for some concern?

Sadiq Khan (Labour, Tooting)

Absolutely. The permanent secretary who gave evidence to our Committee took that on the chin and said that the Department will not seek to recover whatever payments are made through no fault of the claimant. That is some comfort to the distressed constituents mentioned by the hon. Gentleman.

As we heard in our evidence, increased attempts at tax credit fraud resulted in the website being closed down. I welcome the Government's decision to double the number of pre-payment checks before issuing a tax credit award. The Committee was reassured that the majority of attempts to commit identity fraud through the tax credit system were prevented. Nevertheless, I am pleased that HMRC will now be more proactive in contacting certain claimants. The Financial Secretary has taken this issue very seriously, as has his Department. Nevertheless, it is important to maintain the right balance between keeping the system user-friendly, thereby maintaining a high take-up and helping the most vulnerable in our communities, and preventing fraud and overpayments.

Ian Davidson (Labour, Glasgow South West)

May I say that the excellence of my hon. Friend's questions is matched only by the magnificence of his speeches? Does he agree that the PAC offers the only forum where it is possible to have a non-partisan discussion about a scheme such as tax credits, which provides an enormous amount of benefits to a large number of people yet has some clear difficulties and problems? In the Chamber, we often end up with yah-boo politics that generate a great deal of heat but very little light as regards clarifying the difficulties.

Sadiq Khan (Labour, Tooting)

I am grateful to my hon. Friend, and would recommend three sources that confirm what he says. First, the report prepared by the NAO was based on facts and figures rather than dogma. Secondly, the transcript of our evidence, including the questions asked by the Chairman and other hon. Members on both sides of the House, concerned the process and implementation of the scheme rather than the party politics. Thirdly, the PAC report was very balanced and dealt with the facts, problems and challenges while recognising the benefits in a non-party political way. It is a shame that the day after our report was published, the "Today" programme decided to cherry-pick the criticisms, not the excellent and balanced parts that were of a non-party political nature.

I should like to end with a couple of words of caution. First, an issue raised in January this year has still not been dealt with—namely, that very good reports are being produced but they are produced too long after the initial NAO reports. When our Chairman wound up the previous debate, he said that he would look into that. I think that a huge amount of progress still needs to be made.

Secondly, the purpose of the PAC is to provide parliamentary scrutiny of the Executive, but that does not mean that it always needs to be critical. The hon. Member for Somerton and Frome—I think that I have quoted him three times in my speech, which must be a record, and always with a generous interpretation of his words—talked about our Committee and our reports highlighting good practice, best practice and excellent practice, but that aspect appears to have been lost. I am concerned that in providing parliamentary scrutiny of the Executive, the PAC may be seen merely to be critical, when it will sometimes be complimentary. That may lead to our Committee being perceived in a way that is unhelpful to those who give evidence, and those of us who are members may become cynical in that regard. Witnesses, who often want to come and be open and get to the root of the problems, may become wary of doing so because of our reputation.

I hope that the experience of the past 300 years will continue in terms of the spirit of our Committee in providing scrutiny, some good and some not so good.

Greg Clark (Conservative, Tunbridge Wells)

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.

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 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:

"Part of the assessment"—

in the pre-Budget report—

"must have been to have an idea of what the pure fiscal effect was of increasing the disregard. That work must have been done; you will confirm that?"

Mr. Gray replied:

"I believe it has been done."

I said:

"Since that information is available, will you write to me through the Committee giving what the assessment is of the pure component of increasing the disregard?"

Mr. Gray said:

"Certainly, in liaison with our Treasury colleagues. We will write to the Committee."

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:

"It is not possible to produce reliable estimates of the cost of the individual elements on their own".

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:

"Before the Pre-Budget Report the Department estimated the cost of this element of the package. The Department should provide details of the estimate it made".

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:

"The figure refers to a change in what claimants would be entitled to. This does not translate into a cost to the Exchequer".

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:

"You have requested information that HMRC holds about the likely cost in 2006/7, 2007/8 and 2008/9 of increasing the earnings disregard in tax credits from £2,500 to £25,000...In this case we have concluded that the public interest in withholding the information outweighs the public interest in disclosing it".

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.

Ian Davidson (Labour, Glasgow South West)

I begin my remarks with a tribute to the Chairman 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—

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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.

Ian Davidson (Labour, Glasgow South West)

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.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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.

Ian Davidson (Labour, Glasgow South West)

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

Richard Bacon (Conservative, South Norfolk)

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

Ian Davidson (Labour, Glasgow South West)

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.

Sylvia Heal (Deputy Speaker, Halesowen and Rowley Regis)

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

Ian Davidson (Labour, Glasgow South West)

I look forward to reading Hansard tomorrow to check exactly how long the hon. 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.

If I have a criticism of the National Audit Office, it is one that I have voiced repeatedly when it has produced reports. I do not think that it pays enough attention to the social class impact of Government policies. It does not carry out a "social class health check" of policies and their implementation. I am continually disappointed by the way in which it allows many Departments not to make any assessment of the different impacts that their policies have on people of different social classes, and the lack of take-up among those with lower incomes and the like. I feel that we should try to incorporate that.

Helen Goodman (Labour, Bishop Auckland)

Was my hon. Friend particularly reminded of that recently when we took evidence from the Duke of Westminster, who had broken through every barrier to become the first major-general in the Territorial Army since 1945?

Ian Davidson (Labour, Glasgow South West)

That is a useful point. It proves that we are an open society. Any old jerk can become the first major-general in the Territorial Army. To be fair to him, he did very much resent any suggestion that he had got there other than on merit. The subtext was that any member of the aristocracy could have become one of the Territorial Army's high heid yins.

It was interesting that when I asked whether any proles or plebs had reached such a level in the TA, not only was I told that the TA did not keep the figures, but the witnesses resented the suggestion that anything of that sort should be monitored. I think the National Audit Office often overlooks the unconscious assumption that we live in an open society, and that there are no barriers. If I have the Chairman's support, I want to continue to be able to impress such points on the NAO, and to raise them in Committee reports. I think it is up to us, as well as pursuing questions of value for money, to try to ensure that those citizens who are in the least fortunate positions in our society have just as much access to the resources provided by taxation as the Duke of Westminster.

I particularly want to make another point. I have brought my box of reports along with me, but colleagues will be pleased to hear that I am not going to read out the highlights of speeches. Rather, I want to demonstrate the scale of work that we undertake. I wonder whether the time has come for us to consider splitting the Committee in some way in order to allow Members to specialise rather more. It is impossible for us all to make meaningful contributions based on personal experience on every matter that comes before us.

We all want to discuss issues with the witnesses in front of us, but in my experience, some of the most constructive and positive contributions to questioning have come from those who can cast some light based on their personal experience, their constituency activities, or some expertise that they have gained elsewhere. It is not possible to have that degree of specialisation across the whole range of governmental activities. If we were to split the Committee to allow a degree of specialisation, it would reduce the burden on individual Members. None of us could adequately prepare for every Committee that goes on every week. We have to pick and choose, so some are missed out. We might be able to make better contributions if we were to revise our methods of operation.

Finally, Madam Deputy Speaker—you will be aware that when an MP says "finally", it usually means that he or she is only about 40 per cent. of the way through, but wants to give the audience some hope; on this occasion, however, I mean finally—I view serving on the Public Accounts Committee as one of the most constructive roles that an MP can have. I am in the fortunate position of having spent almost all my time in the PAC under a Conservative Chairman. I say that because it means that Conservative Members are in opposition and we are in government, which has been a pleasure and long may it continue. I look forward to serving, hopefully, under several other Conservatives. I am conscious that each member of a Select Committee can serve for only eight years. When one of my colleagues said that change might come in 12 and a half years, I thought that it was going to be much longer than that before the Conservatives got into power. I look forward further to serving on the Committee and hope that, under the inspired chairmanship of the hon. Member for Gainsborough—or perhaps the hon. Member for Tunbridge Wells (Greg Clark) or the hon. Member for South Norfolk (Mr. Bacon) in due course—we will continue to hold the Government to account, as we have up to now.

Theresa Villiers (Conservative, Chipping Barnet)

The hon. Member for Glasgow, South-West (Mr. Davidson) is always a tough act to follow. In winding up what has been a very interesting debate this evening, I would like to pay tribute to the work done by the Public Accounts Committee and its Chairman, my hon. Friend the Member for Gainsborough (Mr. Leigh). I would also like to congratulate and thank Sir John Bourn and his staff at the NAO on the vital work that they do.

The PAC and the National Audit Office carry out vital work in safeguarding taxpayers' money and rooting out inefficiency, incompetence and waste in the administration of government and the public services. Their work has been, as we have heard this evening, wide ranging and uncompromising over recent months. In his wide-ranging speech, my hon. Friend the Member for Gainsborough covered the Committee's work, going back as far as 1690. He covered military readiness, consular services, adult literacy—and I was particularly pleased that he highlighted the Committee's important work on cancer treatment.

On cancer, we have an example of both good and bad news. The PAC took note of the work of the cancer networks and improvements in cancer care, but it also felt that better co-ordination between those networks and the primary care trusts that actually spend the money was desirable. It signalled that simpler, clearer and more easily accessible guidance on how to detect the early-stage symptoms of cancer could do much to help remedy the deeply worrying disparities between cancer outcomes in affluent and more deprived communities. I have no doubt that the Government will act on that wise advice of the PAC.

The hon. Members for Portsmouth, North (Sarah McCarthy-Fry) and for Bishop Auckland (Helen Goodman) both focused on the Committee's excellent report on value for money in the public services and on enhancing better project management. They also mentioned the vital importance of pilot projects and of ensuring that lessons learned in one Department can be spread across other Departments as well. They both looked at tackling complexity, especially in the benefits system, and acknowledged the challenge of the difficult tasks of simplification and of reconciling and balancing the needs of flexibility and simplification.

My hon. Friend the Member for South Norfolk (Mr. Bacon) expressed grave concern that the Home Office's accounts were published with a complete disclaimer by the Comptroller and Auditor General. In effect, they were presented to Parliament unaudited, which is unprecedented for a major spending Department. My hon. Friend also outlined ways to prevent the NHS Connecting for Health scheme from turning into the sort of IT disaster that the PAC has all too often encountered. My hon. Friend the Member for Tunbridge Wells (Greg Clark) again had some good news and some bad news. He praised the impact of the PAC's report on the Office of Fair Trading and noted the constructive response to the PAC's criticisms and the increase in activity that they triggered, but he— like the hon. Member for Somerton and Frome (Mr. Heath) and others—expressed concern about the crisis in the tax credits system. He noted the Committee's hard-hitting report on that subject, which was also mentioned by the hon. Member for Tooting (Mr. Khan).

As the Chief Secretary to the Treasury acknowledged in the debate on 7 June, there is now a consensus across the House in support of the principle of tax credits, but the PAC's April report is just one of a succession setting outthe continuing and severe difficulties in their administration. It highlighted the fact that HMRC overpaid £2.2 billion in tax credits to 1.9 million families in 2003-04, much of it due to the design of the scheme, which bases provisional awards on income and circumstances from the previous year. The House has of course heard countless examples of the hardship that overpayment causes to millions of families landed with bills for repayment that they find it hard to meet. The latest figures show that of the 6 million families who receive tax credits, around 2 million were overpaid and 1 million underpaid, meaning that nearly half the payments in the system were incorrect.

The Committee noted that by March 2005, HMRC had set aside some £1 billion to cover debts that it was not confident that it could recover. And the loss to the taxpayer does not end there. Increasing the level of income disregarded for the purposes of calculating the final award has a significant cost. It has the same effect as formally writing off overpayments that cannot be recovered. The increase in the disregard is a key part of the package in the pre-Budget report designed to tackle problems in the tax credits systems, but—as my hon. Friend the Member for Tunbridge Wells said—when officials were challenged by the PAC about the cost of that change, they were unable to provide a figure. Paul Gray of HMRC indicated that such a figure could be supplied, but, regrettably, none has yet been disclosed to the Committee or the House.

The report revealed the continuing and grave problems with the tax credit computer system, which was responsible for at least £184 million in overpayments in 2003-04 and 2004-05. Amazingly, of the £71.25 million of compensation that the Government agreed with EDS, which supplied the defective computer systems, some £26.5 million depended on EDS winning further work from the Government. As my hon. Friend the Member for Tatton (Mr. Osborne) put it, in his characteristically forthright way:

"the company which ministers believe is guilty of messing up the tax credit computer system will pay full compensation only if it is given a chance to mess up another government computer system."

The Committee concluded that HMRC did not have reliable or up-to-date information on levels of claimant error and fraud in tax credits, and that was seriously impairing its management of the scheme and its ability to safeguard taxpayers' money. As we have heard, an organised assault on the tax credits website led to its closure in December 2004. We also know that at least £1.2 billion was lost to fraud and error in 2003-04, and possibly a great deal more. Again, the Treasury faces the acute embarrassment that the Comptroller and Auditor General has qualified his opinion of the Inland Revenue's trust statement because of fraud and error in the tax credit system.

The significant sums lost to the Exchequer as a result of tax credit overpayments need to be viewed alongside the PAC's reports on £3 billion lost in benefit fraud and error and nearly £13 billion lost in fuel duty and VAT fraud, the latter now so large as to undermine the accuracy of Britain's trade figures.

A continuing challenge for the Public Accounts Committee is to ensure that the public sector acts in a commercially hard-headed manner when negotiating to buy goods and services from the private sector. That is one of the key factors highlighted in the Committee's report on "Achieving value for money in the delivery of public services", about which we have heard much this evening. Too often, the Committee has seen examples of manifest failure to achieve a good deal for the taxpayer.

For example, two years after the new Norfolk and Norwich university hospital opened, Octagon, the private finance initiative company that built it, refinanced the transaction, trebling the rate of return that it had predicted for its investors, from 19 per cent. to a staggering 60 per cent. The hospital trust received only 29 per cent. of the refinancing gains, despite taking on new risks and increasing the duration of the contract. Octagon kept £82 million. The Committee concluded that that refinancing produced, in its words,

"a balance of risks and rewards between the public and private sectors that, even for an early PFI deal, is unacceptable."

The gross imbalance resulted from a failure to include a clause in the original contract to allow the benefits of refinancing to be shared between the public and private sectors. The Committee condemned that failing and noted that such clauses are now expected to be included in PFI contracts. The Committee famously described the deal as

"the unacceptable face of capitalism",

but the report highlights failings in government as well. That is a bipartisan point, because the start of the negotiations took place under a Conservative Government, although the negotiations were concluded under Labour.

The evidence given to the Committee indicates that the Treasury and the Department of Health actively discouraged the trust from seeking a better deal. George Monbiot put the point with devastating clarity in The Guardian:

"The deal...was an Easter Egg hunt. In order to persuade the corporations to participate, the government left an extra £95m in the contract for them to find. This money represents the difference between the financial risk the government said they would carry and the far smaller risk...to which they were actually exposed."

Ian Davidson (Labour, Glasgow South West)

I would be grateful if the hon. Lady told us when was the last time a Conservative Finance spokesman favourably quoted George Monbiot and The Guardian in one sentence.

Theresa Villiers (Conservative, Chipping Barnet)

I suspect that it is unprecedented. It just demonstrates how the Conservative party is changing. George Monbiot said:

"The Department of Health told me that the government had not demanded a refinancing share in its early PFI contracts because they would not have offered 'value for money'".

He continues:

"If the department believes that letting private companies walk off with £95m of free money represents good value, it's not surprising the NHS is in crisis."

The PAC is, of course, presented year in year out with examples of projects that go over budget and out of control. For example, the Diana, Princess of Wales memorial fountain had to be closed for major alterations three weeks after it opened owing to design flaws which caused repeated accidents and flooding. The cost rose from £3 million to £5.2 million as a result of what the Committee described as "basic project management failures". It wisely advocated that lessons be learned in planning the memorial for the Queen Mother and suggested that water-based features were probably best avoided.

Another project that caught the Committee's attention was the BBC's White City 2 development. The BBC made 300 variations to the contract and had to pay an extra £60.9 million above the price originally authorised by its governors. However, as we have heard, perhaps the key point to take away from that report is that it was produced as part of a voluntary agreement with the BBC governors to allow the NAO to undertake certain limited studies of BBC activity. The voluntary agreement ends in 2006 and the BBC wishes to retain the final say over what subjects the NAO can and cannot investigate in relation to the BBC's activities. The BBC spends very significant sums of taxpayers' money. In the coming years, as we have heard from my hon. Friend the Member for Tunbridge Wells, we will face many difficult decisions on matters such as the interrelationship of the BBC's commercial and public sector activities, its role in new digital services and its internet presence, not to mention its significant taxi and hospitality bills. As the Chairman of the Committee said in his appeal, surely it is now time for the BBC to receive the same scrutiny as Departments, which are also entrusted with taxpayers' money. I urge the Government to give the Comptroller and Auditor General full access and scrutiny powers over the BBC.

As the time gets ever later, I turn lastly to the PAC's damning report on the deportation of failed asylum applicants, to which several hon. Members referred. In its report of March this year, the PAC concluded that the UK's asylum policy had been undermined by the inability of the immigration and nationality directorate to deal promptly with asylum applicants whose request to stay in the UK had failed. The IND admitted that it did not know how many failed asylum applicants remained in the UK. The Committee concluded that it would take a staggering 10 to 18 years to clear the ever-increasing backlog of removals. The IND also admitted that more than 400 foreign criminals had been released from prison into the community. We now know, of course, that the numbers released were actually considerably higher and that many of those people had committed serious crimes.

In its understated way, the PAC dealt a devastating blow by concluding:

"it is difficult to conclude that the taxpayer is obtaining value for money in the efficiency and effectiveness of the Directorate's operations."

Its report set in train a series of events that led to the admission by successive Home Secretaries that their Department was "dysfunctional" and "not fit for purpose", and to the sacking of one of the most senior members of the Cabinet. That is a classic example of the hugely important work performed by the Committee.

I commend the pivotal role that the Committee played in revealing the true extent of the crisis in the Home Office. I also commend the vital work that it does to safeguard taxpayers' money and protect and cement our democracy. I commend its reports to the House.

John Healey (Labour, Wentworth)

It is a privilege to respond to the debate, and to the Chairman of the Public Accounts Committee and his colleagues. We have had a good and wide-ranging debate, which was led in an exemplary way by the hon. Member for Gainsborough (Mr. Leigh), who chairs the Committee. I was interested by the research that he had clearly done on the institution of the Public Accounts Committee. He traces the Committee back to the 17th century, which means that the Committee is not of a dissimilar age to the post of Financial Secretary to the Treasury, which I am privileged to occupy at present. The hon. Gentleman said that the characteristic of the Committee and its work was rightly objectivity over partisanship. Our debate has been conducted in such a tone.

Although this might not be obvious to some, the Government share many common aims with the Public Accounts Committee. They also appreciate the way in which the Committee helps them to deliver better value for money in public services, even if the Committee quite rightly makes the process rather uncomfortable at times for those involved.

I pay tribute to the work of the Committee and the Chairman of the Committee. The work load of the Committee is such that it meets twice a week and addresses a different issue each time. Anyone who has served on a Select Committee knows that that represents a formidable undertaking, and the Committee members carry out their work with great diligence and assiduousness.

I also formally recognise and pay tribute to the work of the Comptroller and Auditor General and the National Audit Office. They play an important role in supporting the work of the Public Accounts Committee, which, crucially for us all, is the principal way in which Parliament holds the Executive to account. The Committee is Parliament's leading voice in the cross-examination of the Executive.

In that respect, I am pleased to report the progress that has been made on the Company Law Reform Bill since we last debated the PAC in January. Subject to the approval of the House, the new legislation should enable the Comptroller and Auditor General to audit companies in central Government, hopefully from April next year. That will be a significant further step towards implementing the recommendations of Lord Sharman's report, "Holding to Account". One mark of the Treasury's respect for the NAO is the fact that my hon. Friend the Economic Secretary recently decided to ask it to conduct an independent review of the Financial Services Authority. That underlines the value that the Treasury places on the work of the NAO and especially the special commissions that it undertakes for us and other parts of the Government.

Richard Bacon (Conservative, South Norfolk)

I was pleased to hear the Economic Secretary's announcement that the Government had invited the NAO to look at the FSA, as that is a welcome development. However, on the subject of wider scrutiny, the PAC went to the United States, where the Government Accountability Office can follow the public dollar to state level. Indeed, we visited the GAO regional branch in Boston. Yesterday, I met the Auditor General for Wales, together with his staff in Cardiff, who can follow the public pound from the highest to the lowest level, which suggests that our arrangements, particularly for block grants via the Office of the Deputy Prime Minister to local government, leave a great deal to be desired. Obviously, the Audit Commission has separate responsibilities, but there is a case for increasing the NAO's capacity to dig deeper should it wish to do so.

John Healey (Labour, Wentworth)

The hon. Gentleman has been a PAC member long enough to know that the NAO's capacity is essentially a matter for the House rather than the Treasury. However, there may well be a case for following the pound through, as he put it. I shall come on to the scrutiny of public spending, on which a number of hon. Members commented, but it is important to make a clearer link between budgeting, accounting and reporting in the House.

First, however, may I respond to the contribution of my hon. Friend the Member for Portsmouth, North (Sarah McCarthy-Fry)? Like the hon. Member for South Norfolk (Mr. Bacon), she mentioned the PAC's Washington visit, which clearly had a significant impact on the Committee. In discussing the Committee's 36th report, she rightly said that the simplification unit and other programmes that had been put in place were a direct result of the PAC inquiry and report. That underlines the point made by the Chairman that 94 per cent. of the Committee's recommendations have been accepted by Government. The hon. Member for South Norfolk dwelt at length on NHS information systems and development. The subject was not a formal part of our debate, as Mr. Speaker reminded him, but I am sure that the PAC will return to it again and again. I am sure, too, that we will have a chance to debate it properly.

Like the hon. Member for Gainsborough, the hon. Member for South Norfolk spoke strongly about the problem with the Home Office accounts. The Treasury shares those serious concerns. To put it bluntly, the Home Office failed to achieve the professional standards expected of it—the introduction of new accounting software is a routine challenge that Departments should be able to meet. With the support and active involvement of the NAO and the Treasury, the Home Office is working to remedy those shortcomings and to deal with weaknesses under the guidance of its audit committee and accounting officer, who are striving to do as thorough a job as possible, given the limited quality of the available data and the position at the beginning of the year. As for wider financial skills across Government, more than 70 per cent. of Departments, including the Home Office, now have professionally qualified finance directors. A further improvement is evident in their capacity to lay their resource accounts before Parliament before the recess. Some 86 per cent. of departmental accounts are expected to be laid before the summer recess, compared with 51 per cent. last year.

My hon. Friend the Member for Bishop Auckland (Helen Goodman) spoke about the 17th report of the Committee—an extremely important report that draws on the experience of the Public Accounts Committee over recent years and which, like my hon. Friend's contribution, draws on good examples as well as bad in public service and project delivery. She cited the benefit modernisation programme, where order books were replaced by 2.5 million direct payments into bank accounts on time and on budget. My hon. Friend might have cited some of the other subjects that have been covered by PAC hearings of a similar nature—for example, NHS emergency care. Thirty-nine out of 40 of those using accident and emergency departments are now seen within four hours, even though since 1997 the numbers attending A and E are up by 39 per cent.

As the hon. Member for Gainsborough reminded us, the importance of public services is ultimately in the impact that they have on users. The PAC held a hearing on cancer mortality and confirmed that between 1996 and 2003 it went down 14 per cent. for those over 75. In relation to the Treasury's more direct responsibilities, the online filing of self-assessment returns in 2006 meant that nearly 2 million taxpayers filed online. The system coped with enormous peak demands—more than 150 returns a minute at one point—a very significant and successful implementation of a major programme.

My hon. Friend the Member for Bishop Auckland also spoke about the importance of efficiency and the interim report on the comprehensive spending review that my hon. Friend the Chief Secretary published last week. Although it was published only last week, my hon. Friend the Member for Bishop Auckland has obviously taken a preliminary look at some of the ways that we can deliver savings of at least 2.5 per cent. a year in the CSR 2007 period. I know that my hon. Friend the Chief Secretary is working with the Public Accounts Committee to try and establish ways in which the Committee can be as closely involved as possible in the efficiency programme, so that members of the Committee can be confident that they understand the efficiency gains being made without encouraging Departments to concentrate on getting good public reports, rather than achieving the efficiencies required.

The hon. Member for Somerton and Frome (Mr. Heath) stressed that the PAC's reports and its work are not all about bad practice, and that they contain some examples of excellent practice, as he put it. He is not a member of the Committee. I think he is the only Member contributing tonight who is not a member of the Public Accounts Committee, apart from the hon. Member for Chipping Barnet (Mrs. Villiers), who speaks from the Conservative Front Bench. The hon. Member for Somerton and Frome demonstrated the breadth of his interests by dealing with concerns in the Home Office, the Environment Agency, Her Majesty's Revenue and Customs, and even his Somerset villages, which are, rather surprisingly, well served by the Environment Agency Wales for flood protection measures.

My hon. Friend the Member for Tooting (Mr. Khan) picked an interesting report as the focus of his speech—the 22nd report, which looked at maintaining and improving Britain's railway stations. That inquiry by the PAC highlighted the poor state of many stations, particularly in respect of access for disabled people and security. In responding to the report, the Government made it clear that Network Rail is fully funded to maintain the fabric of its stations, and train operators should have priced station upkeep into their bids.

My hon. Friend's remarks demonstrated how the National Audit Office can shine a forensic light on an overlooked part of public service and public spending and study that. The PAC can then hold its inquiry and report. It is part of building up parliamentary and public pressure to bring about reform, change and improvement. I pay tribute to the way my hon. Friend is clearly following up the PAC's work on the subject and will not let the issue go.

Richard Bacon (Conservative, South Norfolk)

I am grateful to the Financial Secretary, who is being very generous. With reference to the contribution of the hon. Member for Tooting (Mr. Khan), I had a chance to go to the Table Office and look at early-day motion 911, which I commend to all hon. Members. I have just signed it.

John Healey (Labour, Wentworth)

I am glad to hear that the hon. Gentleman is continuing the bipartisan tradition of the PAC.

When my hon. Friend the Member for Tooting dealt with the 37th report, he gave the other side of the tax credit story from the one given by the hon. Members for Somerton and Frome, for Chipping Barnet and for Tunbridge Wells (Greg Clark). My hon. Friend was right to say that end-of-year adjustments are inevitable in a system that is designed to be flexible in responding to the changing circumstances of families. The policy and operational changes that my right hon. Friend the Paymaster General has announced are designed to ease some of the problems inherent in that approach.

The hon. Member for Tunbridge Wells discussed tax credits, the report on the Office of Fair Trading and audit access to the BBC, as did the hon. Member for Chipping Barnet. NAO access to the BBC was considered as part of the charter review. Current arrangements involve the BBC's audit committee holding discussions with the Comptroller and Auditor General, with the aim of framing a programme of reviews that the NAO can carry out. That is an important step forward. I should point out that the BBC is not part of government—an important principle and fact to remember—and that it is not, as the hon. Member for Chipping Barnet argued, directly comparable with a Government Department. The importance of its independence is part of the reason why the current arrangements are the right next step to be taken.

Greg Clark (Conservative, Tunbridge Wells)

In that case, how does the Financial Secretary account for the fact that the NAO has access to the World Service, to which questions of independence apply in just the same way?

John Healey (Labour, Wentworth)

As an independent corporation, the BBC is determining—now in close in consultation, and then with the NAO carrying out much of this audit work—the appropriate audit programme for its activities. That seems to me the right way to proceed.

My hon. Friend the Member for Glasgow, South-West (Mr. Davidson) brought an element of entertainment, as well as enlightenment, late on in our proceedings, but he also brought to bear his long experience on the Committee and made two particularly serious points. First, he pointed out that the PAC is perhaps the one body that can be consistently and forensically critical of the Executive's operation without being partisan. It is therefore not only fulfilling a very special role in the scrutiny of government in England and Wales, but clearly playing an important part during the period of the Northern Ireland Assembly's suspension.

My hon. Friend the Member for Glasgow, South-West also argued, importantly, for the assessment of social class being a more regular feature of the way that the NAO studies the pattern of provision of, and the impact of, public services. He is right to stress that, because it is an important element in securing the equity in public service delivery that the hon. Member for Gainsborough identified as one of his six key ingredients in the report published today.

Although there have been no specific PAC hearings this year on the private finance initiative, the hon. Member for Chipping Barnet talked about the Norfolk and Norwich PFI hospital. I remind her that that PFI project opened early and on budget; the problems that the NAO and the PAC examined were to do with the refinancing of that deal. Lessons have therefore subsequently been learned, and all refinancing gains from September 2002 are now shared 50:50 between the public and private sectors. The Treasury has set up a taskforce to assist with refinancing deals in the public sector, as they become a more relevant feature of the conduct of PFI contracts.

In the short time left, I want to touch on three points that the hon. Member for Gainsborough stressed: the comprehensive spending review, this House's scrutiny of public expenditure, and the report that his Committee published this morning. The CSR 2007 provides us with an opportunity for a fundamental review of the balance and pattern of public expenditure. We will take account of what investments and reforms have been delivered to date. We will identify what more needs to be done to meet the challenges and the opportunities that are ahead in the next decade and beyond.

The interim report that was published by the Treasury last Thursday is an important part of that process. However, in all the assessments that we make as part of the comprehensive review process we will use the lessons that can be learned from the work of the PAC. The seriousness and the rigour with which we are determined to approach the comprehensive spending review is demonstrated by the early settlements that were made and announced in the Budget, where for the Department for Work and Pensions, the Cabinet Office, Her Majesty's Revenue and Customs and the Treasury the expenditure limits will fall by 5 per cent. a year in cash terms over the CSR period. The reason for doing this is that it will release almost £2 billion that we can redeploy to our priorities and to front-line services.

I move on to the parliamentary scrutiny of expenditure while I am on the theme of departmental expenditure. I am interested to note that this month the PAC is inviting the Chairman of the Liaison Committee to encourage the departmental Select Committees to devote more time to the scrutiny of expenditure plans. That is an important role for the PAC. The rights and privileges of the elected House of Commons to scrutinise public expenditure are a fundamental part of our democracy and an essential part of our parliamentary system. I welcome, therefore, the PAC's paper, which was published earlier this month. I welcome also the report that was published recently by the Hansard Society called "The Fiscal Maze". It, too, looks at the challenge of how Parliament can scrutinise more effectively the expenditure of the Executive. It is clear from the arguments set out in the Hansard Society's report—it is also the view of the PAC—that we need to introduce a more systematic and challenging parliamentary scrutiny of spending plans. I believe that we need to be able to link more directly the process and scrutiny of estimates, budgets and accounts. In large part, that is a challenge for Parliament. However, the Treasury stands ready to work with Parliament on establishing workable arrangements for improving parliamentary scrutiny of planned spending.

Today, there was published the 63rd report this Session of the PAC, which I welcome. It builds on the 17th report, which was the major focus of our debate in January. It provides a good framework that Departments and public bodies could use when designing and delivering high-quality public services. The 10 steps that it sets out to achieve successful and high quality services probably provide a sound basis for the development of better public services. The six key ingredients that the hon. Member for Gainsborough identified and stressed are also a useful perspective. I am confident that the Government will be able to respond positively to the report within a couple of months.

The PAC, with the National Audit Office, brings an intense inquiry and analysis to the shortcomings of Government. I am reminded of the words of Edward Phelps, who in the 19th century was the Second Comptroller of the US Treasury. I am prompted by the comments of several Members in the debate to say that it is the examples of good as well as of bad that need to be considered. If we concentrate on the bad, there are risks. Edward Phelps said:

"The man who makes no mistakes does not usually make anything."

The most important thing to do when things go wrong is to learn from the event. Undoubtedly, the work of the PAC helps us to do just that. As Cicero said,

"Any man may make a mistake but none but a fool will continue in it."

I commend the work of the PAC. I commend the 63 reports produced by the PAC this Session. The Committee carries out important work on behalf of the House and also on behalf of the taxpayer and public service users.

Edward Leigh (Conservative, Gainsborough)

With permission, Madam Deputy Speaker, I shall briefly sum up and, in particular, thank the Financial Secretary, who has just given a model summing up for a debate. He made an effort to go through every speech and ended with an important point about increasing financial scrutiny by the House of the whole budget process. When I started this process, I think that there was some scepticism about whether other Select Committees would be sufficiently interested in these issues, because in recent years they have tended to concentrate on policy. Following what the Financial Secretary said today, we have had an extremely important pointer now that the Treasury in a sense is giving a green light to the process upon which the Liaison Committee is embarking. Our meeting in October or November will be very important. I am particularly grateful for what the Financial Secretary said.

I apologise for the fact that I cannot at this late hour indulge in Ciceronian poetry and prose—I wish that I could. All I can do is briefly thank those hon. Members who have taken part. However, I should say to the hon. Member for Somerton and Frome (Mr. Heath) that he made an important point. We are talking about the scrutiny of £500 billion-worth of expenditure. The main part of parliamentary scrutiny lies in this Committee, and it is unfortunate that this debate has lost some of its zest in recent years and is dominated only by members of the Committee. I wish that we could find some way of getting other hon. Members to take more of an interest in these debates, but I say to the business managers that we will certainly not do that if we are still debating these issues at a quarter to midnight. We must pursue this, and I am grateful to the hon. Gentleman for what he said.

The hon. Member for Tooting (Mr. Khan) made a fundamental point, and the Financial Secretary made this point too, when he said that this is the one Committee that can be a critical friend of Government without being partisan. We take enormous care to try to ensure that our reports are balanced, that we encourage risk taking—the Financial Secretary quoted Edward Phelps on risk taking—and enormous care is taken with the press releases. The trouble is that whether it is the "Today" programme or newspapers, the media are not generally interested in good news. I apologise for that, but as politicians we recognise that that is the nature of our business, so we try to be a critical friend.

I thank also the hon. Member for Portsmouth, North (Sarah McCarthy-Fry); my hon. Friend the Member for South Norfolk (Mr. Bacon), who reminded us that to err is human, but for a really monumental cock-up, hire a new computer system; the hon. Member for Bishop Auckland (Helen Goodman), who dealt so effectively with the need for efficiency gains; the hon. Member for Tooting, to whom I have already referred; my comrade friend the hon. Member for Glasgow, South-West (Mr. Davidson); and my hon. Friends the Members for Chipping Barnet (Mrs. Villiers) and for Tunbridge Wells (Greg Clark), who brings a superbly gifted forensic mind to our debates.

We have had a good debate and we look forward to our next six months of work.

Question put and agreed to.

Resolved,

That this House takes note of the 4th, the 7th to the 9th, the 12th to the 34th and the 36th to the 42nd Reports, and the Second Special Report from the Committee of Public Accounts of Session 2005-06, and of the Treasury Minutes and the Northern Ireland Department of Finance and Personnel Memoranda on these Reports, Cm 6699, 6728, 6743, 6766, 6775, 6789, 6843, 6863 and 6884.