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Mr. David Rendel (Newbury): As the right hon. Gentleman is talking about letters of direction, has he considered what should happen when the CAG has reported to him about letters of direction that have been notified to him, the CAG? Given the Public Accounts Committee's role in holding the Government to account to Parliament, would it not be appropriate for all such letters immediately to be placed in the Library so that they are available to all Members?
Mr. Davis: I have a great deal of sympathy with that point of view. The hon. Gentleman will remember that when the first letter of direction was brought to the Committee's attention, I asked the Committee to authorise exactly that procedure, but I am not entirely certain that it would be appropriate in every circumstance. Perhaps the right approach would be to make that procedure the norm but not to make it always the case because occasionally there may be occurrences when a degree of Government confidentiality should be respected. In most circumstances, it would be a good innovation in itself.
I shall continue on that note. Openness between Parliament and the Executive is a further essential ingredient of effective accountability. I have been especially disappointed at the deplorable failure to keep Parliament informed of the financial position at the millennium dome. In that instance, the accounting officer of the Department for Culture, Media and Sport provided the board members of NMEC, a quango established as a company with full obligations under company law, with an indemnity, the value of which could have run into hundreds of millions of pounds.
The accounting officer was advised by the Treasury that there was no need to draw the indemnity specifically to the attention of Parliament as it deemed it to be covered by a general indemnity for all board members of all quangos that had been notified to Parliament in 1998. As a consequence of that advice, the Executive committed potentially hundreds of millions of pounds of taxpayers' money, for such costs could not have been met from lottery money without any specific authority from Parliament to do that. That is wrong, and following representations from the Committee, the guidance on when Parliament should be notified of such commitments will be revised. However, it does illustrate the scant regard for the interests of Parliament that is found in some parts of Whitehall.
A further vital tenet of accountability is the conventions that govern the way in which Ministers should respond to the reports of the National Audit Office and Select Committees. Long-established conventions require the Government to consider carefully Committee reports and to provide a formal response to the House when they have had an opportunity to study the conclusions in detail. Immediate comment should be confined to clarification or explanation of the reports, not to snap responses.
The current conventions were reaffirmed in 1990 in the correspondence between the then Lord President of the Council--Geoffrey, now Lord, Howe--and the then Chairman of the Liaison Committee, Terence Higgins. The basic principle of the guidance given was the need for Departments to avoid pre-empting or prejudging the Government's final and considered reply to recommendations from Select Committees and the Public Accounts Committee, which must first be given to the House. However, in recent weeks we have seen Ministers rush to judgment, either misrepresenting the Committee's findings or taking issue with agreed facts. Recently, our estimate of deaths from hospital-acquired infections has been disputed, despite the fact that the Department's accounting officer had already agreed the figure with the National Audit Office.
A similar incident occurred following publication of our recent 45th report on the acceptance into service of the Chinook mark 2 helicopter and the crash of one of those helicopters on the Mull of Kintyre, when Defence Ministers reacted hastily and negatively. That report formed part of our wider study of the MOD's acceptance of equipment off-contract and into service, which formed the 44th report, and both reports were issued simultaneously.
Mrs. Ray Michie (Argyll and Bute): May I say how much my constituents and I welcomed the 45th report, as the Chinook crashed on the Mull of Kintyre? Does the right hon. Gentleman agree that the MOD could set aside the verdict of gross negligence on the part of the two pilots? The MOD need not admit that it was wrong, but new rules now cover boards of inquiry and it should lay the matter to rest and get rid of the very unfair and unjust verdict, which the report highlighted.
The Committee deliberated long and hard on the Chinook incident and amassed a significant body of evidence, mostly from the MOD, to support the conclusions that we reached. We aimed not to establish the truth of what happened--which is unknowable--but to point to the severe weaknesses in the processes by which the MOD accepted those helicopters into service and the subsequent procedures by which they concluded that the fault for the crash lay with the pilots. The immediate public response from Ministers was a discourtesy to the Committee, prejudices the Government's considered response and, in my view, flies in the face of the agreed convention.
One Minister even suggested that the PAC was acting beyond its remit. I have three responses to that suggestion. First, it is for the House of Commons and the Committee to decide our remit, not for Ministers. Ministers are accountable to Parliament, not the other way round. Secondly, the investigation arose from a study of the badly managed introduction into service of the £140 million upgrade that created the mark 2 Chinook. After six years in development and three years in production, that helicopter was still having erratic engine-control software problems during flight testing. As a consequence, its operational capacity was restricted for more than four years after the Mull of Kintyre crash.
Similarly, the Committee concluded that the accident investigation procedure was flawed, and therefore could not guarantee to deliver the lessons necessary to enhance future safety and performance. Those matters clearly all come within the Committee's remit. Finally, in the midst of that assessment of performance, the Committee was faced with what we unanimously thought to be a serious risk of an injustice. In my view, not only is it the right of any parliamentary Committee to bring injustice to the public's attention; it is the duty of any parliamentarian to do so.
I am afraid that some of these trends suggest, in some quarters, a disregard for the rights and responsibilities in Parliament in regard to the process of accountability. The Government have no reason to fear that process, as is demonstrated by careful consideration of the Committee's work over the past 12 months. That and, I hope, what I have said over the last half hour show how valuable we are.
In many instances, we have provided a "tool kit" for improvement that will enable the Government to get better value for each pound that is spent. It is the accountability process that allows us to do that. The pillars of the process--control of the Chairman's rights to examine the report, and the Committee's right to take evidence from officials--are well cast. Most important of all is the concentration on the implementation of policy, rather than its merits. That allows us to rise above the party political fray, and to focus on the scope for improved delivery of public services.
People enter the House for many reasons. Some come to help the weak, some come to protect the vulnerable, and some come to empower the powerless. I doubt that many come to check the accounts. I hope, however, that what I have said today demonstrates that the PAC, a diligent, hard-working and talented Committee--I refer to its other members, not to myself--seeks to do both. I also hope that it does so to the benefit of the country, the taxpayer and, indeed, the Government.
Mr. Alan Williams (Swansea, West): First, let me apologise for the fact that I shall probably croak my way through my speech. The Whips seem to wait until I am seen walking around with a packet of tissues before arranging this annual debate.
I congratulate you, Mr. Deputy Speaker, on your good fortune in chairing the most eagerly awaited debate of the year--a debate of such weight and importance that the press literally cannot wait for it to happen.
I thank the right hon. Member for Haltemprice and Howden (Mr. Davis) for his kind comments about his predecessor, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). My right hon. Friend entered the House on the same day as me in 1964, and has served it since with great eminence. He was one of the longest-serving Public Accounts Committee Chairmen. He has chaired the Public Accounts Commission and now chairs both the Standards and Privileges Committee and the Liaison Committee.
My right hon. Friend has asked me to apologise for his absence. I know he has already apologised to the right hon. Member for Haltemprice and Howden. He was unable to cancel existing engagements because--as inevitably often happens--we were told of the debate at very short notice.
I join the right hon. Member for Haltemprice and Howden in expressing gratitude to our Clerk, who is something of a parliamentary character himself. His advice is always blunt, clear and sound, and we are lucky to have him.
No one doubts that all the other Select Committees envy us the National Audit Office. That is not surprising, given their impoverishment in terms of support for their work in shadowing Departments; but as other Members have recognised over the years, it is not just a matter of envy. There is no way that a Public Accounts Committee, meeting a limited number of times a year and consisting of members who are effectively part-timers in terms of monitoring--after all, we must all do our constituency work and our other parliamentary work--could monitor expenditure properly, and provide the accountability that Parliament needs, without the NAO.
I also congratulate the Chairman of the Committee on his willingness to embrace change and experimentation, which does not always make one friends. The Committee needs to consider its position because, with an average 50 hearings a year, it is the bottleneck in the scrutiny process. I have put my views on that on the record in many previous debates, and I know that my colleagues pore over those comments regularly as bedtime reading.
In relation to the right hon. Gentleman's willingness to experiment, the Public Accounts Committee tries--we have done so once or twice before, but now do so more regularly--to overcome the continual frustration of holding hearings without the witnesses who were in office at the time that the events occurred. Early retirement seems to be as popular among some accounting officers as it is in the police force. On one occasion, we called back one chairman--who was by then an ex-chairman--for a hearing in May. I asked him when he had first heard the date for the Public Accounts Committee hearing, to which he replied, "Two weeks before Christmas." I then asked him when he had handed in his resignation, to which he replied, "One week before Christmas." That is the problem we have faced.
The right hon. Gentleman or my hon. Friend the Minister may be able to recollect--I cannot for the moment--the identity of one of the ex-accounting officers whom we called back for what appeared to be a very critical hearing. He was very helpful because of his personal perspective on explaining the events surrounding the particular decision-making process, and that changed our perception of what had happened. Although the NAO report was adverse and we had to be critical, our report was substantially less critical because the witness was so clear and helpful, and we congratulated him on his evidence to the Committee. Although it is a cause of discomfort to them, the recalling of accounting officers is essential if we are to establish what happened when things went wrong, if they went wrong. We do not blame when there is no blame. However, if there is blame, it must be discovered and attributed.
The right hon. Gentleman referred to maladministration in the state earnings-related pension scheme, which was a sad case dating back to 1986. In that respect, I congratulate Treasury and other departmental Ministers because although the failing was not of their making, they devoted a massive sum to try to redress the injustice that has been done or could have been done to many people.