Budget Responsibility and National Audit Bill [HL]

Debate between Lord Eatwell and Lord Touhig

Thursday 9th December 2010 Grand Committee

[Lord Touhig]

My Lords, perhaps I may at the outset apologise if I am partly responsible for your Lordships having to meet again today. I very much regret that I had not anticipated the speed with which your Lordships would complete their deliberations on earlier amendments. Although I was around on Monday, I was in the Chamber. I apologise again if my failure to be here has meant that the Committee has had to meet again today.

I apologise also for the fact that this amendment is a manuscript amendment. My original Amendment 41 was deficient in that it used the term “Advisory Committee on Public Appointments”, when it should have said “Advisory Committee on Business Appointments”. I took the information from the 15th report of the Public Accounts Commission. I am afraid that I should have been more careful and checked out that information.

Until earlier this year, I served on the Public Accounts Committee in the other place. As a result of that experience, I have been able to witness at close hand the tremendous work that the National Audit Office does and to see how important the work of the Comptroller and Auditor-General is in keeping a check on how government spends the taxpayer’s money. Crucial to the role of the C&AG is the independence of the person who occupies that office. It is vital that the office is both independent and seen to be independent. For this reason, none of his decisions should be seen as being born of self-interest.

Under the Bill, future appointees to the office of the Comptroller and Auditor-General will serve a one-term period of a maximum of 10 years. There will be the real prospect of former C&AGs, on leaving their appointment, seeking other employment. Indeed, in a letter to me following Second Reading, the Minister made that very point—I have copies if any noble Lord wishes to have sight of it. In the letter, the Minister points out that the Government hope that future C&AGs will want to continue their careers after they complete their 10-year term of office. If this is to be the case, it is important that sufficient safeguards are in place to ensure that that does not compromise the position of the Comptroller and Auditor-General in office.

The Public Accounts Commission’s 15th report of March 2008, to which I have referred, contained a number of proposals that sought to create safeguards. The Bill, however, reduces some of them. The commission proposed that the former Comptroller and Auditor-General should abide by decisions of the Advisory Committee on Business Appointments if he or she were to take up any further employment having left the job. My Amendment 41A would require this.

The Bill states merely that former C&AGs should consult with such people as may be specified by the Public Accounts Commission. I understand from the Minister’s letter that the wording in the Bill would allow for more flexibility on which individuals or organisations were asked to give advice. While I understand from the Minister’s letter that the wording in the Bill would allow for more flexibility on which individuals or organisations are asked to give advice, it could result in inconsistency over time, as to both who gives the advice and what advice is given. It is fairer on former Comptroller and Auditor-Generals if, at the outset of their term of office, they know who will give them advice on any appointment that they may take up on leaving office as well as the basis on which these decisions will be made. As such, I suggest that stipulating who will advise former C&AGs is preferable. Furthermore, the commission’s original proposals stated that former C&AGs would have to abide by the advice that they were given regarding their future employment. The Bill does not allow for that.

The Minister in his letter to me following the Second Reading debate stated that, if a former C&AG were to take up a position against advice received by the commission, the commission would be free to make that advice public. He drew the parallel with how advice is given to former Ministers and argued that that would be a strong deterrent against any former C&AGs going against that advice. However, former C&AGs do not have the same high profile as former Ministers; a former C&AG who ignored the advice of the commission would perhaps not attract as much attention or interest as a former Minister who did such a thing. Hence my Amendment 41A.

Amendment 42 would change the time limit on when former C&AGs may accept Crown employment. If former C&AGs were immediately able to accept a position that is in the gift of the Government, there would be a danger that some people could perceive such an appointment as being a reward for actions taken while in office. That would undermine the integrity of the C&AG and lead to his actions while in office being called into question through speculation about his future.

The Public Accounts Commission suggested in its 15th report that former C&AGs should be prohibited from ever accepting any post that the National Audit Office has audited or which was in the gift of the Government. That is a heavy penalty. The Government agree: the Bill prevents former C&AGs from providing services to the Crown or to a body that is required to open its accounts to audit by the National Audit Office for a period of just two years. However, while it is entirely understandable that we would not wish to put a restrictive life ban on former C&AGs, I suggest that two years may be too short a period. If we accept that the greatest risk is of attempts by the Executive to influence the C&AG, the sensible course would surely be for a time limit to be at least five years. In that time, there is the real prospect that the Government will have changed and that a former C&AG’s appointment would be considered as a Crown appointment by others. Such a time limit would mean that a C&AG would not be able to rely with any certainty on the incumbent Government still being in office at the time when he or she might accept some Crown appointment, which would overcome any suggestion of political influence on any decisions that a C&AG would take while in office. Amendment 42 would be the best guarantee that, between a C&AG leaving office and subsequently being appointed to a Crown position, there was likely to have been a general election.

The Bill is in the main a good Bill. It proposes to do some sensible things, but our task is to scrutinise, question and improve it. I suggest that the two amendments that I have tabled for your Lordships’ consideration will make some improvement to the Bill.

[Lord Eatwell]

I support Amendment 41A proposed by my noble friend Lord Touhig, albeit on a slightly different basis. Given that this appointment will now be for only one term of tenure, it is important that we attract people of the highest quality to the post. If they felt that their future career prospects were endangered, it is likely that we would not have the very best field from which to choose. Therefore, when someone comes to the end of their tenure, it is appropriate for them to receive advice from an established committee whose procedures and standards are well known and in the public domain, and whose approbation or approval of a particular post is seen as having undergone a strict assessment as to the impact on the integrity of the post and the individual. If we are to get the best applicants for this sort of job, we must give some certainty about the nature of their future careers. The involvement of an established body with agreed procedures and standards would help to provide that.

Interestingly enough, if my noble friend’s Amendment 41A were accepted, his Amendment 42 would be less important. The committee would have given its approval of the post and that would receive general acceptance. Therefore, the longer time period might not be so necessary. However, I defer to my noble friend, who has much more experience in these matters than I do. The Government should look carefully at Amendment 41A, which would improve both the Bill and the performance in this particular post.