HC Deb 01 March 1866 vol 181 cc1368-75

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a second time."

MR. THOMSON HANKEY

said, that though this Bill was one of great importance no explanation had been given at its introduction; and though he understood the Bill was to be referred to the Committee which had been appointed respecting the Public Accounts, he thought its principle ought to be known to the House before it went into Committee. The Bill was practically an abolition of all control of that House over the issues by Votes of Supply. He was not going to object to its principle, but it was a very important one. The Committee on Public Money which sat several years ago discussed very fully the nature of the control exercised by the Comptroller of the Exchequer over the public issues of all money from the Exchequer. After a Vote by Parliament an application was necessary to be made to the Comptroller of the Exchequer, and his sanction was given if he ascertained that the Vote was in accordance with the Act of Parliament. This was the check which the present Bill would abolish. He perceived that the Chancellor of the Exchequer dissented from this statement. He admitted that the opinion of the Committee on Public Money appeared to have been that the check was of no very practical importance. Still it had had the sanction of Parliament from time to time, and the Comptroller of the Exchequer had been supposed to hold an office of great importance. This Bill was to unite the office of Comptroller with that of Auditor. Now, the duties of the Comptroller and those of the Auditor were two sorts of duties which had always appeared to him, and had, he thought, appeared to the Committee, to be very different the one from the other. The Chancellor of the Exchequer dissented from his statement that such was the opinion of the Committee; but the Committee never had recommended that they should be united and discharged by one officer. It might be wise to abolish the office of Comptroller and make the real check that of the Auditor. It was true that while there had been a control over the issues there had been none over the expenditure. No issue could be obtained without Parliamentary authority; but the moment the issue took place Parliamentary control ceased. The recommendation of the Committee was that the Audit Office should be made a more important one, and that it should be made so efficient that, early in the following year after the various Votes of Supply were passed, every Mem- ber of Parliament might have a document before him signed by the Auditor—the Auditor being appointed by the Crown—which would contain a complete account of the expenditure. The Committee attached less importance to the control of the issues which was exercised by the Comptroller. The control of the Comptroller of the Exchequer was to be exercised before the money was issued, and the object of the Audit was to see whether the money, after being issued, had been properly spent. It was not a very intelligible principle to vest these two functions in the same person. It would be better ostensibly to abolish the office of Comptroller of the Exchequer altogether. A Bill of that importance ought not to pass a second reading merely pro formâ, without discussion.

SIR STAFFORD NORTHCOTE

said, he quite agreed with the hon. Member that it would be wrong and even indecent to read a Bill of such cardinal importance a second time without some discussion. It related to a matter which really lay at the root of the functions of the House of Commons—namely, the granting of money; and it appeared materially to alter the principles on which Parliament had proceeded. They were not, however, in a satisfactory position then to discuss the subject. The question was one with which comparatively few Members of the House were acquainted, and even those few could not speak authoritatively on the merits of the measure till they had had an opportunity of looking more closely at its clauses, and examining officers outside of the House as to the operation it might be expected to have. They might talk very easily as to the matter of principle, and say it was a question whether they would have two checks or one—whether they would have the principle of control, and the principle of audit, or whether they would trust mainly to the latter. But if they were to substitute the principle of audit for the principle of control, they must show that by their regulations they made the principle of audit thoroughly effective; and for that purpose it would be necessary to examine those Gentlemen who were practically concerned, as representing the Audit Office and other Departments of the State, as to the exact effect of some of these clauses. That was just one of those questions upon which they were bound in duty not to trust the Government, but rather, if he might say so, to distrust it. He did not intend to speak disrespectfully of Government, for he thought it was a very good and safe rule to trust Government on most questions on which the Government were probably well informed, and the House imperfectly informed; but when they were granting the public money they were bound to require, and to insist on, and to see that they got a security that the money granted by the House for the public service should be spent in the manner which the House intended it should be. As to the control of the Comptroller of the Exchequer, whatever it might have been formerly, it had of late been merely a nominal control; because, although it was necessary that the Treasury or other Departments which applied for the issue of money should apply for it in such form and for such purpose as the House had voted it, and the Comptroller would not otherwise allow it to go out of the Exchequer, he afterwards entirely lost sight of it, and: it was in the power of the Treasury, for anything he could do to prevent it, to spend the money on any other service. Then the Comptroller became useless, and even mischievous, because he caused Parliament and the country to shut their eyes to a danger that was real, and prevented their turning their attention to what was a real security—namely, an efficient system of audit. True, they might have made the power of the Comptroller a real living power, capable of preventing the expenditure of any money except in the way directed by Parliament; but then they must have much hampered the action of the Executive, and kept up a number of separate balances in the hands of separate paymasters; which would have been the reverse of an economical proceeding. Most people would agree that it was desirable to keep the balance as low as possible, and to have one balance instead of a large number. Undoubtedly, the system of audit had not been as thoroughly elaborated as it might and ought to have been, and the great merit of the present measure was that it did at least attempt to make that system fully efficient. The proposal to send the Bill to a Select Committee was a very wise and proper one, because the Committee would be able to satisfy itself by the evidence of the officers of the Audit and other Departments whether such proper provision had been made as to the mode of keeping accounts, the way in which the audit was to be conducted, and the thorough independence of the auditors, as would really accomplish the end in view. It ought to be clearly understood, when the Bill went be- fore the Committee, that the Committee were to be free, and the House free also, to adopt or reject it as they thought best, after the examination to which it would be subjected. The Bill was to be referred, he believed, to the Committee on Public Accounts; but the House ought to understand what were the functions of that Committee, and that it was not a Committee to which every question of finance was to be referred. The Committee of Public Accounts was appointed as the organ of the House for a very special and rather uninteresting purpose, and the House ought to take care not to withdraw the attention of its members from their special duty, that of revising the audit of public accounts. There were two kinds of audit. First the administrative audit, conducted by the officers of the Audit Board under the directions of the Treasury, in order to see whether the money had been expended in accordance with the directions of the Treasury. The auditors examined into and reported to the Treasury upon the expenditure of money, and the Treasury took note of any irregularity that might have occurred in regard to that expenditure. Next, there was the Appropriation Audit, which was performed, not for the Treasury, but for that House. It was with reference to the latter that the Committee of Public Accounts was appointed, and it was their function to examine every year the audited accounts of the previous year's expenditure. He had had the honour of sitting upon the Committee since its appointment and during the six years of its existence; and he confessed that the members of it found it more agreeable and interesting to devote their attention to questions of general principle than to the dry work of looking into the details of the accounts. He hoped the House would be cautious how it supplied them with matter more attractive than their proper business. He thought that they ought to thank the Government for having framed so efficient a Bill, which would, in his opinion, effect a great improvement in the mode of auditing the accounts, and would establish a simple and more effective system.

THE CHANCELLOR OF THE EXCHEQUER

said, he agreed with almost everything that had been stated by his hon. Friend opposite (Sir Stafford Northcote). The Bill, no doubt, was a very useful one, and it was incumbent on the House to see it thoroughly carried out. When the House voted money it parted with it for certain uses, and it then passed under the control of the financial department of the Treasury, and was distributed among various organs of the State all over the world. The accounts were then made out and sent permanently to the Board of Audit; but the last portion of the circle remained incomplete until the Committee of Public Accounts had done its duty. It was not till then that it could fairly be said that the office of the House, as the real authoritative steward of public monies, had been discharged. It was with no wish to press their opinion on the House that the Government had come to the conclusion that this Bill had better be referred to the Committee of Public Accounts; and if the House thought it ought to be referred to another Committee, the Government would gladly give way. His hon. Friend (Mr. Thomson Hankey) objected to the two offices of the previous control and the final audit being conferred on the same person. No doubt, the functions were perfectly distinct in themselves, but they did not occupy the full time of a public officer, and no advantage could be gained by separating them. It was impossible to make the previous control of the accounts absolutely efficient. If all the money were paid in London, it might be done; but the expenditure was distributed all over the world, and it was physically impossible to make the Exchequer control that which in theory it ought to be. He agreed with his hon. Friend that that which was intended for a good purpose would become a mischievous purpose if it went out to the world that the public had a security for the laying out of the money which really did not exist. The Government were not entirely spontaneous and independent agents in the introduction of this Bill; but the Bill was of great importance, because it embodied a final decision that the theory of the law was to be made to conform to the established and recognized practice, instead of the practice being made to conform to the theory. For a long series of years that the practice under the law had not been in conformity with the law was a matter of perfect notoriety. If the Members of the Committee to whom the Bill was referred should come to the conclusion that it was not well suited for its objects, they would properly decline to consider themselves bound by the step which it was now proposed to take.

SIR GEORGE BOWYER

said, he took great interest in the question, having really been the originator of the Public Monies' Committee. Reference to the Parliamentary proceedings of the period when the matter was before discussed would show that high authorities, such as Lord Grenville, Lord Lyndhurst, and Lord Monteagle, attached great importance to the powers exercised by the Comptroller of the Exchequer over the issue of public monies. Recent proceedings in Prussia also showed the constitutional importance of control over the issue. As he understood the question which arose in Prussia, it was that their House of Commons refused to vote the supply for the army. The Crown, however, on the plea that it felt bound to provide for that branch of the Administration, expended the money. If a control over the issues had existed, that course would not have been pursued by the Crown. And the fact that the Comptroller had no power over the items after they had left him did not detract from the constitutional importance of the office as a control over the issue of public money. The right hon. Gentleman the Chancellor of the Exchequer had said the Comptroller of the Exchequer had not enough to do, and that, therefore, as his time was not fully occupied, it was undesirable to keep up his office separately. He did not concur with that view of the matter. If a public officer's time were not fully occupied, that was no reason for jumbling his duties with those of some one else. They might as well have said if the Commander-in-Chief was not fully occupied, that he should also take office as Archbishop of Canterbury. He noticed that all through the Bill the functions of receipt and issue and the functions of the Audit were confounded together, when they were actually very different portions of the administration. In the whole system the great difficulty which had struck the Committee on Public Monies was this. There was a control over the issue, but when the money was issued there was no control at all; so that' between the issue and the audit the Treasury could do just as they please with the money. The control over the issue was a constitutional control; and the control by the Audit an administrative control. But the Audit Department was by no means effectual. The accounts of the Secretary of State were not audited by it. The Board of Audit was subject to the Treasury, whereas it should, in his opinion, be superior to it in the matter of account, just as the Chamber of Accounts in France was. The French Chamber of Accounts had jurisdiction over all accountants; it had power to summon them to account and to produce vouchers and papers, and to examine them on oath, and to hear and determine all questions of account and to enforce its orders by fine and imprisonment. It was the Supreme Court of accounts. The Board of Audit in this country should have similar powers. The French Chamber of Accounts was most perfect in its machinery; and he believed the Board of Audit would never work effectually until it was endowed with a constitution somewhat similar, and was possessed of the powers he had described. The Board of Audit ought not to be at the mercy of the different Departments, but to have the power of acting judicially, and making orders upon the accountants to appear for examination, and produce such vouchers as might be deemed necessary for the rendering of the accounts. Till that should be done the House would not have a complete audit.

MR. CHILDERS

said, he did not think the hon. and learned Member could have read the Bill, which provided that accountants should transmit their accounts, together with the authorities and vouchers relating thereto, to the office of the Commissioners, in such form, and for such periods, and under such regulations as the Commissioners might prescribe. The Bill would extend the audit to all branches of the public service, and effectually prevent the intentions of Parliament being contravened.

Bill read a second time, and committed to the Committee of Public Accounts.