CLAUSE 15.—(Audit, &c.) (Hansard, 8 February 1929)

§ The SECRETARY of STATE for SCOTLAND (Sir John Gilmour)
I beg to move, "That the Clause be left out."

§ Mr. WEDGWOOD BENN
The object of leaving out the Clause is. I presume, to enable the right hon. Gentleman to move a new Clause?

§ Sir J. GILMOUR
Yes.

§ Mr. BENN
The new Clause will come after new Clauses put down by private Members, and, as we have exactly half-a-day to discuss all the new Clauses, it is possible that the whole question, in which the city I represent is intensely interested, will never be discussed at all. I not know whether it is possible on a Motion to leave out a Clause for the right hon. Gentleman to give some indication of what he proposes to put in its place? I suggest that the right hon. Gentleman should tell us what he intends to substitute for Clause 15.

§ The CHAIRMAN
I ought to point out that the procedure under the Resolution of the House is that where a Government wishes to omit a Clause, only two speakers are allowed, and, if the right hon. Gentleman makes a speech, there will be room for only one more speaker.

§ The LORD ADVOCATE (Mr. William Watson)
My recollection is that the Government's new Clauses are taken first, and not after the proposed new Clauses of private Members.

§ Mr. BENN
Is that right? Does the right hon. Gentleman mean that Government Clauses have precedence of all private Members Clauses before the Guillotine falls?

§ The CHAIRMAN
Any new Clauses moved by the Government are put first after the Clauses in the text of the Bill 2096 have been dispensed with, so that any new Clauses of the Government will come earlier than new Clauses of private Members.

§ The LORD ADVOCATE
I do not know whether it will be in Order to enter into the details of the new Clause?

§ The CHAIRMAN
I think that the Lord Advocate will be in order in making a statement as to the omission of this Clause, and in saying what he proposes to put in its place.

§ Mr. WESTWOOD
On a point of Order. Is anything in Order from the other side in view of the Midlothian and Battersea results?

§ The LORD ADVOCATE
The purpose of the Clause that we are moving to omit is to apply, subject to what I shall mention in a minute, the rules of audit at present applied under the 1889 Act to county councils. Under the county council provisions, there is a means of surcharge, but there is not under the Town Council Act, or, as far as I am aware, under the private Acts of the large burghs. The other important point is that the auditor should be independently appointed by the Secretary of State. That is so under the County Council Act, and I think, subject to certain variations, that is the general effect of the local Acts. Under the Town Council Act of 1900, and the local Acts of large burghs, the usual form of provision for taking objection to the accounts is to permit any ratepayer interested to inspect the accounts, and, if he objects to any items, to appeal to the Sheriff within a limited period. That is the practice in regard to most of the Acts It has been found very difficult to work out, and is not very happily expressed. The Clause proposes that the right of surcharge shall be followed and applied all round as it exists in the 1889 Act, and there will be inserted a right to get a stated case on a point of law for the decision of the Court. It is quite clear that the Secretary of State is not a suitable person to settle such questions of law and there may be many important questions that will arise.
There is a further point in regard to the question of surcharge, and it is right that I should mention it as one of the alterations proposed in the new Clause.
2097 It is quite clear that it was intended by the previous Act that in a case where there was a technical breach of duty, that is, in a case where the act was done bona fide, a surcharge should not be made. On a point of law, it is clear that a member of a town council who has authorised such an expenditure quite innocently, thinking that he was right in law, should not be surcharged.
We have put in the new Clause to show that where there is no real blame surcharge is not to be made. That is an important addition, because people who are willing to become members of such bodies are anxious to know what their possible liabilities are going to be, and therefore we thought it would be a help to have it expressed on the face of the Clause. That is one of the alterations which necessitated the new Clause. In the case of the education accounts, there is retained the departmental supervision of accounts which has existed for a great many years now. There is a special reason for that. I cannot now go into it fully, but I will explain it briefly. A very large part of the moneys handled by education authorities, whether it be the ad hoc authorities or the new authorities, consists of Government grants for particular purposes. These are applied almost entirely under minutes of the Education Department, minutes which are very often altered from time to time and are of a highly technical nature, and no ordinary auditor or accountant could be expected to know the exact implications of those minutes—they are minutes dealing with a variety of things, the grant of bursaries and other matters. It is also very important that these grants should be administered on a uniform basis throughout the country.
The truth is that the ordinary auditor will probably find it a great help to have the check and assistance of the expert of the Education Department, who is and has to be familiar with the mnutes of the Department and with the exact purpose for which the grants are given. That is the reason for retaining that provision. It may be asked why this does not apply to other accounts. It is obvious that education is a specialised subject; the other accounts do not raise such difficult questions of a technical nature. There is a similar retention of central audit in the 2098 case of National Health Insurance and for very much the same reason.

§ Mr. BENN
Would the right hon. Gentleman say whether there is going to be any new form of audit established over the trading accounts?

§ The LORD ADVOCATE
No.

§ Mr. BENN
In their case it will be exactly as it is now?

§ The LORD ADVOCATE
Except that they are subject to the general provisions for surcharge.

§ Mr. BENN
Will the power of the central department be increased,—I mean as regards surcharge?

§ The LORD ADVOCATE
I thought I had made it clear that what we are doing is to extend the power of surcharge to all the burghs, and that means the extension of it over all the accounts. We must have uniformity right through.

§ Mr. KIRKWOOD
Does it not follow from what you have said, that as far as you are concerned the most reactionary authority will be your guiding line and block the most progressive authority?

§ The CHAIRMAN
I must point out that we are proceeding here under a peculiar and special rule, which allows only one brief explanatory statement from the Minister and one speech against, in cases where the Government propose to leave out a Clause. We cannot have a debate. I am bound to put the Question at the end of those speeches.

§ Mr. WILLIAM GRAHAM
On a point of Order. May I ask what is the present position? The Lord Advocate is making the explanatory statement. Have the rights of this side of the Committee been exhausted by the brief speech which has already been made? If that is so, are we to have an opportunity to ask questions of the Lord Advocate when his statement is completed?

§ The CHAIRMAN
Perhaps I had better read the words of the Order of the House. A Motion may be made by the Government to leave out any Clause or consecutive Clauses of either Bill before consideration of any Amendments of the Clause or Clauses in Committee; and the Question on a Motion made by the Government to 2099 leave out any Clause or Clauses of either Bill shall be put forthwith by the Chairman, or Mr. Speaker, after a brief explanatory statement from the Minister in charge and from any one Member who opposes the motion. That is the Rule.

§ Mr. GRAHAM
The narrow point I put is whether the rights of this side of the Committee to one speech have already been exhausted?

§ The CHAIRMAN
I am afraid that is so.

§ Mr. GRAHAM
When the Lord Advocate has concluded, are we to be at liberty to ask the right hon. Gentleman questions—not to make speeches, but to ask questions arising from his statement?

§ The LORD ADVOCATE
On a point of Order, it was an interruption to which I gave way in the course of my brief statement.

§ The CHAIRMAN
I do not think there can be any questions after the Lord Advocate has sat down; but, if hon. Members wish to put questions they can do so now, as long as they do not allow them to develop into arguments.

§ Mr. WESTWOOD
I would like to ask the Lord Advocate if his statement means that the department of the accountant of the Scottish Education Authority is maintained, and that when the duties of the Education Authority are transferred to the town and county council that duty continues. Does it not follow from that, that so far from reducing central control and duplication of audit, which was understood to be a part of this scheme, that system is in fact perpetuated, and indeed strengthened by what the Government proposes?

§ The LORD ADVOCATE
I thought I had made clear under the new Clause the present position in regard to the Education Audit, that there is a supervising audit, from a totally different angle.

§ Mr. KIRKWOOD
Seeing that the Lord Advocate gave way to me and allowed me to put my question—not in the form of an interruption, as he suggested—may I ask if he will now reply to that question?

§ The LORD ADVOCATE
I thought I had answered it. But may I say that my right hon. Friend is quite willing to undertake, as I understand he can, to put down this Clause as the first of the new Clauses, so as to make certain of getting a discussion on it if it is desired that there should be one.

§ Mr. WESTWOOD
May I put a question with reference to the statement of the Lord Advocate that there was a desire for uniformity, particularly in connection with bursaries. In the past the auditor has never objected to legitimate payments being made, though they vary in different parts of the country. Am I to understand that under the proposal of the Government there must be uniformity in connection with the granting of bursaries throughout the length and breadth of Scotland?