HC Deb 05 April 1978 vol 947 cc463-99

Question proposed, That the clause stand part of the Bill.

4.34 p.m.

Mr. Francis Pym (Cambridgeshire)

The Committee will be extremely disappointed that, through no fault of its own, we have lost one hour of the time available under the timetable for today. It means that we shall have rather less than one and half hours to consider 15 or 16 clauses and one schedule. This is absolute nonsense and a parliamentary farce. I regret it very much, but we must do the best we can in the circumstances.

The financial provisions of the Bill were criticised yesterday in many ways from all sides, and the Committee was extremely disappointed by the replies it received. Indeed, there were no answers to some of the questions that were asked by hon. Members from both sides of the Committee.

The Minister of State, Treasury, had an uncharacteristic lapse yesterday. Perhaps it was caused by the shock of his first plunge into the iced water of devolution. He certainly gave the impression of a lack of understanding of what the almost continuous debate on devolution is all about, but no doubt he has begun to remedy that this morning.

I should like to return to a point which was raised yesterday by my hon. Friend the Member for Pembroke (Mr. Edwards), who said: I am not clear where the Bill says that money transferred from the loans fund to the Consolidated Fund can still be used only for loans fund purposes. He had asked that question previously, and the Minister replied: The hon. Gentleman will find the explanation in Clauses 43 to 45 where reservation is made in respect of transfers".—[Official Report, 4th April 1978; Vol. 947, c. 322.] My hon. Friends and I have looked at this matter again, and we are still not clear about how it is to be cleared up and how it is catered for in the Bill. I hope that the Minister will be able to say something more about it later.

The financial provisions are obviously extremely important, because the Assembly will control the expenditure of public money without at the same time carrying any responsibility for raising it. It was made clear yesterday that, on its own, Wales could not afford devolution. It can afford devolution only if it is paid for on a British basis. It is vital for the Committee to grasp that point, otherwise there is a risk of dangerous misunderstandings arising which could lead to great disappointments.

Until now, the per capita public expenditure allocated to Wales has been neither questioned nor challenged in England or anywhere else. Good will and good sense have prevailed over what an hon. Member on the Government side has described as a generous arrangement.

If the arrangements in the Bill are not right and if the Assembly in its management of financial matters is not careful, that good will could easily vanish. If public expenditure were allocated strictly on a population basis throughout the United Kingdom, the people of Wales would wonder what the Bill had done to them.

Clause 43, which relates to payments, says: No payment shall be made out of the Welsh Consolidated Fund except in accordance with credits granted on the Fund by the Welsh Comptroller and Auditor General". and: The Welsh Comptroller and Auditor General shall grant credits on the Welsh Consolidated Fund at the request of the Executive Committee". We therefore come at once to the relationship between the Welsh Comptroller and Auditor General and the Executive Committee. Whatever Clause 19 may say and whatever the words may appear to mean, the Executive Committee will be, in effect, a Cabinet. It will come to be regarded and treated as such and it will think of itself as such. Its members will think that they speak for Wales, will say that they are fighting for Wales and will represent themselves as the authentic voice of Wales. I believe that the 36 hon. Members from Wales are and should always be the true and effective voice of Wales.

The clause helps to put the Executive Committee in the position that I have stated. It will control the expenditure and hold the money bags which so many people and interests in Wales will, understandably, be after. Without action by the Committee, I do not think that any expenditure will be possible.

The procedure in the clause is for the Executive Committee to make a request to the Welsh Comptroller and Auditor General. That is obviously a highly responsible post, and whoever occupies that office will be a key figure. What is the nature of that office and the status of that official? We have to turn to Clause 51 to discover the answer to those questions.

Clause 51 says: The Welsh Comptroller and Auditor General shall be appointed by Her Majesty and…may be removed from office by Her Majesty if the Assembly resolves that the Secretary of State be requested to recommend the removal to Her Majesty". At the outset, therefore, there is a direct connection between the Assembly, led and effectively dominated by the Executive Committee, and the Welsh Comptroller and Auditor General.

The clause says that the Comptroller and Auditor General is to be appointed by Her Majesty, but effectively the appointment will be by the Executive Committee. Certainly, the occupant of that post may be removed from office if the Assembly resolves in that sense. I notice, however, that no specific reason is required to be given as to why or in what circumstances the Comptroller and Auditor General ought or could or might be dismissed or removed from office. It is an absolutely wide open arrangement that, if the Assembly so decides, the Comptroller and Auditor General can be removed from office.

Some more clear reasons should be given as to the circumstances in which that would be a possible action to take. As Clause 51 is designed, the appointment of the Comptroller and Auditor General is of a political type. I am not saying that it will be made as a political appointment, but it is of a political type and political considerations could come into it.

I should like to know whether the Committee feels with me that the House of Commons ought to have a say in this appointment. Is it right to appoint, to allow to be appointed and to allow to be removed someone in this extremely important and responsible office on the basis laid down in the Bill? I accept absolutely that if all the characters involved, including all the members of the Executive Committee and the Comptroller and Auditor General, are first-class people of the highest integrity, and if good will exists all round, as everybody hopes and wishes, the system will work satisfactorily. Almost any system will operate satisfactorily on that basis. If the Assembly ever comes into existence, we all hope that it will be like that.

Let us suppose, however, that that is not the case. No one would claim that the people of Wales are paragons of virtue. I do not think that anybody has claimed that, not even the Welshmen themselves. [Hon. Members: "They would."] I observe that there are quite a number of hon. Members who are challenging that and raising doubts about it. However, we are legislating in the Bill for a major constitutional change. Surely, we must do so and prepare ourselves for all kinds of circumstances and eventualities that may arise. We cannot simply legislate on the basis that everybody will do the right thing and be highly responsible. We have to legislate in a way which takes care of all possibilities, whether they are likely to occur or not. The Committee will therefore want to hear how the architects of this unwanted Bill visualise the procedure in Clause 43 working in practice.

There is bound to be enormous pressure and heavy demand upon the Executive for the expenditure of money. Many of the issues to be argued about come down to money in the end. That is what people want in order to fulfil their desires and ambitions. It is important, therefore, to ensure that the arrangements for the payments of moneys as laid down in the Bill are correct and that the control of expenditure is as tight as it can be.

The Committee will want to be satisfied that the arrangements proposed are adequate and that the relationship between the Executive Committee and the Comptroller and Auditor General is correct and proof against any improper interference.

Mr. Tam Dalyell (West Lothian)

The speech of the right hon. Member for Cambridgeshire (Mr. Pym) proves yet again how unsatisfactory it is that many clauses in the Bill can go undiscussed. Had we succumbed to the temptation to let this go and go on to more important matters, many of the issues would not have been raised. There are a great many problems under the mantles of other clauses that have gone undiscussed.

As I intend to make what might be thought to be some extreme assertions to the effect that the setting up of a Welsh Comptroller and Auditor General is a resounding nonsense of a proposal, I had better state my credentials to the Committee.

From 1963 to 1966 I was a member of the Public Accounts Committee of the House of Commons, serving under three chairmen—my right hon. Friend the Member for Huyton (Sir H. Wilson), Lord Houghton of Sowerby and Lord Boyd-Carpenter. I think that they would concede that I have taken a keen interest in the work of that Committee. I was well tutored by the then Comptroller and Auditor General, Sir Edmund Compton. For the last two years I have been Vice-Chairman of the European Parliament Control Committee on Budgets, which is the embryo equivalent of the PAC, looking at how the Commission spends its money. I say this because I am asking hon. Members to take it from me that I know something of what I am talking about.

4.45 p.m.

To hive off one part of the Exchequer and Audit Department to Edinburgh and a lesser and somewhat different part of it to Cardiff is a ludicrous proposition if the criteria are to be connected with the efficiency of the work of the Department. Heaven knows, it is difficult enough a task to conduct a meaningful audit in the complexities of a modern State. To make the task more difficult by setting up mini-audit departments in Cardiff and Edinburgh with unclear demarcation boundaries of who is responsible for what is frivolous for any Government concerned with keeping public expenditure under control. I am glad to say that my hon. Friend the Minister of State was making a note when I mentioned unclear demarcation boundaries. If he can persuade us otherwise, he will have helped his case, and it is a very important point that must be answered.

I have a question to ask. Like the right hon. Member for Cambridgeshire, I am being as quick as possible because we have other matters to deal with. I ask a question of which I give the Minister of State notice. It might have been possible to answer it off the cuff. Has Sir Douglas Henley, the present Comptroller and Auditor General, or any of his predecessors in the job of Comptroller and Auditor General, been consulted about the break-up of this audit department? If so, what was their opinion? If they have not been consulted, why is this so?

Sir Raymond Gower (Barry)

Is it implicit in the argument of the hon. Member for West Lothian (Mr. Dalyell) that if Assemblies are set up in Edinburgh and Cardiff he could consider that a better system would be to retain the central Comptroller and Auditor General's Department as it is now and reconcile that with the existence of the two Assemblies?

Mr. Dalyell

That is not a question that I am qualified to answer, but it is a real question about precisely what the costs will be of breaking up the present Exchequer and Audit Department.

I ask a further question. What does this arrangement cost over and above the present arrangement, first of all in money terms and, secondly, in skill? The training and salaries of extra auditors at this level are not matters to be taken lightly.

On 9th January 1978, during the debate on the report of the Public Accounts Committee, I asked in my original speech—reported at col. 1389—for Treasury thinking about the establishment of a Scottish Public Accounts Committee: Where will the expertise come from to form a Scottish Comptroller and Auditor General's Department? We who have served on the Public Accounts Committee know that considerable skill and expertise reside in this Department. Where will it come from? I see that the Chairman of the PAC is approving my question. At that point the right hon. Member for Taunton (Mr. du Cann) nodded his head vigorously. A reply came from my right hon. Friend the Financial Secretary to the Treasury, who said: It will come as no surprise to my hon. Friend to hear that these matters have not been determined in full. There are many aspects of the operation, following the setting up of the Assembly in Edinburgh, which will be the subject of further determination, and which will not necessarily be detemined well in advance. Detailed discussions of these matters will continu."—[Official Report, 9th January 1978; Vol. 941, c. 1389.] I returned to the subject on 10th January during the discussion of the Scotland Bill. I will spare the Committee all that I said about it in that speech, but I have to say that all that my hon. Friend the Minister of State, Privy Council Office could do in winding up was to spend time telling me that I had a vivid imagination but, alas, there was no answer to any of what I considered to be perfectly sensible questions.

What has happened in the meantime, since early January, about these discussions? For example, where is the Comptroller and Auditor General to come from? Is he, presumably, to come from the existing Comptroller and Auditor General's Department? Is he to be one of several of the existing auditors?

There is also the question of transfer from one audit department to another. The hon. and learned Member for Cleveland and Whitby (Mr. Brittan) cannot laugh at this, because if the Exchequer and Audit Department is to be responsible to Assemblies in Edinburgh and Cardiff presumably it will have a somewhat different promotion structure. We should at least be told whether the new arrangements come within the existing Audit Department.

Mr. Leon Brittan (Cleveland and Whitby)

Far from laughing at the hon. Member, I was smiling in admiration at his ability to disclose what lay under the manholes that he describes.

Mr. Dalyell

I am sorry if I misinterpreted the hon. and learned Member's smile.

This question occurs in relation to Clause 52(2) which reads: There shall be paid to or in respect of a person who ceases to hold office as Welsh Comptoller and Auditor General such amounts by way of pensions, allowances or gratuities or by way of provision for any such benefit as the Assembly may from time to time determine. That would seem to indicate that we are dealing with a different organisation and a separate career structure. It seems that the Government have hived off a different department from the existing Exchequer and Audit Department. The question of transfer is therefore relevant.

The next issue that this raises is whether this mini-department will have the expertise that is available to the existing Exchequer and Audit Department. Hon. Members who have served on the Public Accounts Committee know that within the department there are whole ranges of expertise and specialisation. An all-round auditor is something of the past. To be effective requires specialist auditors. I cannot imagine the whole range of specialities being available to another audit department in Edinburgh and yet another audit department in Cardiff. Any hon. Member who has served on the Public Accounts Committee knows that the range of skills necessary for different matters is considerable.

In 1973–74 the Public Accounts Committee discussed the improvement of the Taff Vale Road. The following year it dealt with the hospital laundry service in Wales. Of course, in addition many issues were covered by the PAC which related both to England and Wales. The accounting officer from the Welsh Office is therefore sometimes summoned with the accounting officers of, say, the DHSS, the Department of the Environment or the Department of Transport for discussions of topics of common interests. In these situations will the expertise available to the Exchequer and Audit Department be made available after the Assembly is set up to deal with specific Welsh problems which might arise, such as those dealt with by the PAC? What will happen, for example, on matters that effect Wales when the accounting officer comes from the DHSS? Like my hon. Friend the Member for Bedwellty (Mr. Kinnock), I am not against change, but I am against half-baked change, and I have the very strong impression that that is what we are here embarking upon. Certainly these issues had not been properly thought out by 10th January.

I am still puzzled about the status of the Executive Committee. Will it be a Cabinet? Will it be an executive committee of the majority party? Is there to be some kind of a Chancellor of the Welsh Assembly Exchequer? If so, does he not need his own Treasury expertise if this arrangement is not to be, as we were assured yesterday by Ministers it would not be, glorified local government? We were rebuked for making that suggestion yesterday. If there is no Chancellor of the Welsh Exchequer, who will decide on priorities? We cannot tell from the vagueness of the statements describing the Executive the form it will take.

Presumably the Executive will determine its priorities within a given sum. But has it not occurred to my hon. Friend the Minister of State and to a number of my other hon. Friends that when it is stated that the Assembly will be more sensitive in determining priorities within a given sum that is by implication a damning indictment of my right hon. and hon. Friends in the Welsh Office. It is an indictment that I would not have the impertinence to make—the suggestion that they are so out of touch that they do not know the priorities and that the Assembly would be in much closer touch with the priorities than they are. As far as I know every Welsh Minister has his home in Wales and goes back there every weekend. In those circumstances it is fanciful to suggest that the priorities established by my right hon. and hon. Friends are so wrong that the creation of an Assembly is justified to alter them. At best an Assembly can only tinker, but for the whole panoply of an Assembly to be used to alter priorities seems fanciful.

Mr. Geraint Howells (Cardigan)

I have listened with interest to the hon. Member's speeches over the last few days. Will he explain whether his remarks mean that he is in favour of devolving power to the people of Wales but not to the people of Scotland?

Mr. Dalyell

No, I am in favour of bringing decisions closer to the people, but I think that it can be done quite adequately by local government. I would not have the impertinence to suggest how it could be done through local government in Wales, and if that were the issue I would not be detaining the House now. But we are discussing the setting up of a subordinate Parliament, and that concerns every hon. Member.

The Minister of State, Treasury (Mr. Denzil Davies)

It is not a subordinate Parliament.

Mr. Dalyell

This is where we get into very difficult waters. People have to make up their minds about this matter. If it is not a subordinate Parliament it must be conceded that it is no more than glorified local government.

Mr. Denzil Davies

There are different forms of devolution.

Mr. Dalyell

Then tell us what different forms there are.

Mr. Denzil Davies

My hon. Friend seems to be wedded to existing institutions, and unable to raise his sights beyond the normal kind of Comptroller and Auditor General. He suggests that all we have is a Cabinet and nothing else. There is for him only a subordinate Parliament or a county council. He must understand, however, that there are different forms of devolution. We are discussing here executive and administrative devolution, not legislative devolution.

Mr. Dalyell

I am more and more puzzled about precisely what is proposed. My right hon. Friend the Minister of State is busily doing an excellent job in other directions, but I wish that he could have been present during some of our previous debates.

Mr. Eric S. Heffer (Liverpool, Walton)

Is not the position that whilst in Scotland this body will be called an Assembly, in Wales many hon. Members, and certainly the Welsh nationalists, will regard it as a Parliament? The Welsh have been told that they are getting an Assembly, but once they get it they will want it to be the same as the Assembly in Scotland. At the moment they do not know what they are getting. It is neither one thing nor the other. Is this not further proof that the whole affair is an absolute shambles?

Mr. Dalyell

I do not want to be drawn further on this matter because the guillotine falls at 6 o'clock and I intend to be brief. My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) is a member of the national executive committee of the Labour Party. There is one question I have to put concerning the Executive of the Assembly. Some of my hon. Friends are under the happy assumption that there will always be a Labour majority in Wales. Suppose that by some mischance in the far future the Conservatives and the Welsh nationalists constituted a majority. There would then be the difficulties of a coalition. Who would form the coalition with whom? The same applies in Scotland. If we have an Executive with a coalition, and one of the partners—

The Chairman

Order. The hon. Gentleman is dealing with a hypothesis. He must keep in order on the clause that we are discussing.

Mr. Dalyell

I end by saying, Mr. Murton, that I hope that we shall be told something about what is envisaged as regards the nature and working of the Executive.

5.0 p.m.

Sir Raymond Gower

To take up the discussion between the hon. Member for West Lothian (Mr Dalyell) and his colleague the hon. Member for Liverpool, Walton (Mr. Heffer), it would seem that the Assembly is either an embryo Parliament or a form of window dressing. It must be one or the other. The Government have always professed that they are in no way taking something vital out of the government of the United Kingdom. Indeed, they have said all along that they are adding to United Kingdom government.

In this instance we are dealing with payments only out of the Welsh Consolidated Fund. We are not dealing with the Welsh Loans Fund. However, I draw the Minister's attention to the last part of subsection (1), which states: This subsection does not apply to transfers under Section 42(2) above". The subsection that we dealt with last night concerned transfers from the Loans Fund to the Consolidated Fund or vice versa. The fact that subsection (1) of Clause 43 does not apply to those transfers highlights the importance of the argument put to the Minister yesterday, and the argument advanced by my right hon. Friend the Member for Cambridgeshire (Mr. Pym) in his opening remarks today.

I hope that the Minister will give us an answer to the query that has been repeated many times. What is in the Bill to ensure that after transfers have been made the moneys are used for the purposes for which they were originally designed? In other words, loans money should be used for that purpose, and parts of the Consolidated Fund money allocated to capital expenditure should continue to be used for that purpose. The right hon. Gentleman has not answered that query, which has an added significance when we consider the wording of Clause 43(1).

I agree with my right hon. Friend the Member for Cambridgeshire that the importance of the office of Welsh Comptroller and Auditor General cannot be overstated. It is a notable feature of the clause that deals with the appointment of this officer and, if necessary, his removal from office that it prescribes only how he may be removed. It is said that he may be relieved of office by Her Majesty at his own request. He may be relieved of office by Her Majesty if the Assembly resolves that the Secretary of State be requested to recommend removal. However, it does not provide how he should be appointed. There is merely a reference to appointment by Her Majesty.

The clause does not prescribe whether appointment should be on the recommendation of the Assembly or, at the request of the Assembly, on the recommendation of the Secretary of State. Surely it is as important to prescribe how the appointment should be carried out as to prescribe he should be removed. Surely the manner of his appointment should be described in some considerable detail. I hope that the Minister will take note of that requirement. It may be that under the guillotine procedure we shall not have the opportunity of discussing that matter in the detail that it deserves.

Obviously the appointment is one of tremendous importance. The Welsh Comptroller and Auditor General will be the officer who will issue the credits. He will be the officer who ensures that all the moneys are spent in accordance with the resolutions of the Executive Committee of the Assembly.

I ask the Minister what I believe to be a pertinent question that takes up the remarks of the hon. Member for West Lothian. The hon. Gentleman discussed the disadvantages of having subsidiary Comptrollers and Auditors General for Scotland and Wales. If we are to have separate Assemblies in Scotland and Wales, and perhaps separate Assemblies in the regions of England in future, is it not possible to retain the United Kingdom Comptroller and Auditor General for all the Assemblies? Is there any necessity to have separate Comptrollers and Auditors General? Is it necessary to divide the expertise or, in some cases the lack of it?

I submit that there is no valid reason for having separate Comptrollers and Auditors General as prescribed in the two Bills. There is a perfectly respectable and good reason for retaining the United Kingdom system of the Comptroller and Auditor General, who would have much more experience. It would be valuable for the new Assemblies to be able to rely on the accumulated experience of the United Kingdom Comptroller and Auditor General and his Department.

I hope that the Minister will reconsider this feature of the Bill. I hope that he will consider the possibility of not having separate Comptrollers and Auditors General. That in no way destroys the Bill or lessens its effectiveness. I hope that the Minister will accept that I am making a constructive suggestion. I believe that it could improve the service that would be available to the Assemblies from the Comptroller and Auditor General. That is one of the issues that arises from the wording of the clause. I hope that the Minister will be able to give us some clear answers to our queries.

Mr. Ian Grist (Cardiff, North)

My hon. Friend the Member for Barry (Sir R. Gower) and the hon. Member for West Lothian (Mr. Dalyell) are quite right to query the necessity of having separate Comptrollers and Auditors General. Clearly these separate officers are part of the panoply of having separate Parliaments. Their provision will be further proof of the separate nature of the Assemblies away from the House of Commons. That is really what we are discussing, although in Clauses 43 and 45 we are meant to be detailing the forms of expenditure. Of course, that is all that the Welsh Assembly will be able to do as its form is proposed. It will be able only to spend.

As we found yesterday, the Assembly will have no power to raise its own money. Therefore, the guts of the issue is how it will be allowed to spend the money that the House of Commons votes for it? That in turn will be the real issue of the referendum that will come should the Bill be passed by both Houses of Parliament. It will be the expectations that are built up over Clauses 43 and 45 that will be the guts of the referendum. Apparently, the money that this place votes will be voted willy-nilly, voluntarily and readily. We heard yesterday just how readily it will be voted during the remarks of the hon. and learned Member for Montgomery (Mr. Hooson). It seems that more houses will be built, more schools and all the other factors that will be put before the Welsh peopel as reasons for them to vote "Yes" in a referendum.

That is all to do with the expenditure side of the Assembly. There will be no odium in its having to raise money so it will be able to promise to do what it especially favours on the expenditure side. What power will Members of Parliament have over the expenditure? We shall be those who will vote the money for the expenditure, but what power or say will we have over the way in which the money is spent? It is quite clear from the clause that we shall have no power or say.

Mr. D. E. Thomas (Merioneth)

Is not that precisely analogous with the position of local government and this place, whereby we in the House of Commons approve a rate support grant order and the money is spent on education, social services and housing, for example, by local authorities? That is spending for which we have no direct responsibility.

Mr. Grist

When the referendum comes, I shall be interested to see whether the hon. Gentleman compares the Welsh Assembly, and what he hopes to see it grow into, with a local authority. I suspect that he will be putting it forward as a national body and a first step towards an independent Wales.

Mr. Thomas

The hon. Gentleman has misunderstood me. I was not comparing the Welsh Assembly with a county council or district council. I was saying that we in this place approve money for spending by local authorities in precisely the same way as we shall approve money when the Assembly is established. When the money is voted, it will be for the Assembly to decide its priorities within Wales.

Mr. Grist

I think that the hon. Member misunderstands the way in which the money is voted by the House of Commons for all the local authorities within the United Kingdom. It is then distributed through all the various local authorities, be they in England or in Wales, in which we all have a say. Once the money in this particular Assembly has been voted, with English money and English votes, we shall have no say. Nor will the English have any say. There is an entirely different aspect, to which we shall be coming after 6 o'clock this evening, to discuss just what is the difference between a local authority and the way in which the House of Commons deals with the local authorities, and the way in which it is proposed that we should deal with the Assembly.

We shall be in a position of merely supplying the money for this particular expenditure under Clause 43. If we disagree with the way in which the Assembly proposes to spend money, we shall be in the wrong. Whatever the Assembly's proposal is, we shall be told "This is the demand of Wales. This is the requirement of Wales", and this will be said by a body that will have all the prestige and all the standing of a national body. We shall be outnumbered, as Welsh Members of Parliament. If English Members of Parliament choose to oppose it, they will be told that they are denying Wales. If Welsh Members of Parliament oppose it, they will be told in certain quarters—let there be no mistake about this—that they are traitors to the interests of Wales.

If Welsh Members agree with the proposals of the Assembly to spend the money as proposed, what then? We are just messenger boys carrying the message of the Assembly. It will not be our decisions on the way in which money is spent. We shall be sent here essentially in order to argue the case for the Assembly to spend the money as it wishes.

Mr. Dafydd Wigley (Caernarvon)

Will the hon. Member give way?

Mr. Grist

No. We have only about 50 minutes to go on this clause.

Getting the money will be about the only real power that a Welsh Member of Parliament will have. It will be one of the essentials for a Welsh Member of Parliament—to come here to get the money to be spent under Clauses 43 and 45. Apart from interfering in foreign affairs, and defence, that will be the major power that we shall have.

Yesterday the hon. Member for West Lothian (Mr. Dalyell) gave thanks that there was a Treasury Minister to reply to this particular debate on the financial provisions. He was sorry that the same thing had not occurred during the debates on the Scotland Bill. But the Minister of State, Treasury is not sitting here merely as a Treasury Minister. He is sitting here as a Welsh Member of Parliament.

If we have an Assembly, how many Members of Parliament from Wales will be able to sit as Treasury Ministers—not just on the Front Bench, say, but as Treasury Ministers? There will be an annual argument over the money for the Assembly and the expenditure by that Assembly of that money. If the Minister of State does not believe me, I would refer him to the consultative document, sections of which must have been written by his Department, and to the proposals for a block grant and the expenditure of a block grant by elected Executive Committees. In that document it was pointed out that this would have a very dangerous effect on the management of the economy of the United Kingdom.

How could a Welsh Member of Parliament who had to deal with the block grants, and the effects that the expenditure of those block grants might have on the management of the economy of the United Kingdom, be able to come to the House of Commons as a Welsh Member and lay down the policies of his Government that were contrary to what the Welsh Assembly might well be wishing to do? I should like to know the Minister's opinion on that section of the consultative document and on the effects of the block grant on the management of the economy.

I am sorry that the hon. Member for Bedwellty (Mr. Kinnock) is not present today. During the debates on the Scotland and Wales Bill he said that devolution made nationalists of us all. That, of course, is the truth of the matter.

I hope that the Government Front Bench notice the hilarity on the Plaid Cymru Bench. Plaid Cymru Members know this: establish the Assembly, establish the spending power of the Assembly, make sure that it does not have the odium of raising the money, and all the argument will be to spend more under Clause 43 and grant more under Clause 45. They know that the one body standing in the way of the power to spend money, as we all want in our constituencies and in our interests, will be this House.

Who will get the major blame for that from the nationalists and the electorate of Wales but the local Welsh Members of Parliament sent to this place in order to gain money not for purposes that they can oversee or for the purposes that they want to spend, but in order that the Assembly, which may not be at all of the complexion that they want, can spend it in the way in which the Assembly wants.

5.15 p.m.

Mr. Ioan Evans (Aberdare)

The question of the need to appoint a separate Welsh Comptroller and Auditor General is something on which I hope that we shall have a reply from my right hon. Friend, because there has been a big argument in Wales about whether there should be a separate Civil Service to cater for the Assembly or whether it should remain a part of the British Civil Service. I think that the general feeling is that the people employed by this Assembly—if we ever get one—and I think that it is very doubtful that it will be voted for in a referendum—

Mr. Wigley


Mr. Evans

We shall see. No doubt we shall get a lot of letters calling for it, but as one editorial says today, that is the dirty tricks department of the nationalist party writing them, so that does not really reflect the opinion of Wales. The people of Wales will decide whether they are to have an Assembly.

But there is the argument that the people employed by the Assembly should be part of ale British Civil Service. I wonder, therefore, why there is this move to create a separate Welsh Comptroller and Auditor General. One would have thought, in fact, that if the moneys are to be allocated from the national fund to the Assembly, it would not be a bad thing for the same group of people, the people who are deciding on the amounts, to be not only auditing the sending of the money but overseeing the disbursement of that money.

As the purpose of the Bill is to maintain the unity of the Kingdom, surely the people dealing with the auditing should be the same as those dealing with the disbursement as well as sending the money from this place. I should have thought that that would be a better move.

Mr. D. E. Thomas

Is the hon. Member aware of the existence of district auditors?

Mr. Evans

Yes, of course. The point is that what we are talking about now is the question of allocations of funds from this body to another body, and as it is not a separate fund-raising organisation, and will be using funds from this body, there is in this case no need to have a separate Comptroller and Auditor General. That is the point that we are making.

Mr. Tom Ellis (Wrexham)

Is my hon. Friend aware that this body also sends funds to the EEC, which has found it necessary to establish its own court of auditors, which is, in effect, the same thing as a Comptroller and Auditor General?

Mr. Evans

I should have thought that the difference between a Welsh Assembly and the EEC was so obvious that it did not need to be stated. That example is completely irrelevant. That is where nine nations have come together to create a new and separate Parliament that will be directly elected and of which we are only a part.

But what we are being told by the Front Bench is that the Assemblies that we are creating in Wales and in Scotland are very much a part of this body, and that this is being done to unify the Kingdom and not to break away. The point has been made, and I should like an explanation.

However, the more important point is that we are dealing with Clause 43.

Mr. Denzil Davies

Are we?

Mr. Evans

Yes. I am glad that my right hon. Friend is aware of that. Clause 43 deals with payments out of the Welsh Consolidated Fund, but it is a later clause, Clause 46, which talks about payments into the fund. I should have thought that technically we would have put payments into the fund first, before talking about payments out of it.

Mr. Timothy Raison (Aylesbury)

Carrying the hon. Gentleman's point further, does he agree that it is interesting that the wretched Welsh Comptroller and Auditor General is not established for several more clauses to come, so the whole sequence seems to be cockeyed?

Mr. Evans

To further this point, one does not know how the way in which the clauses flow into the Bill has been arrived at.

I return to my point about payments into the fund before we start allocating money. What will be the basis for the allocation of the funds to the Welsh Consolidated Fund? This is a vital question, the answer to which we and the people should know before the people determine whether there should be an Assembly.

For the House of Commons, there are certain criteria for public expenditure. The criteria for public expenditure for the length of and breadth of Britain—from Land's End to John o'Groats—is laid down by the House of Commons. The purpose of creating an Assembly is that there should be different criteria for Wales. We feel that more should be spent on housing in Wales. It could be argued that we spend more on education in Wales than in other parts of the United Kingdom. There is now a desire for an equality of standards throughout Britain.

What will happen when there is an Assembly? The whole ethos of the Assembly is to create different standards. We are told that an Assembly will be better able to determine where money is spent than can the House of Commons. We are told that the Assembly is better able to decide whether to spend the money on education or on roads. If that is to be the case, we are moving into a new era where the amount of expenditure required will raise important and vital questions. Obviously we shall be in conflict because whatever is given to the Assembly will never be sufficient.

We are always arguing for money to be spent to improve the social services, but we have to balance that with taxation. In the Budget on Tuesday the Chancellor of the Exchequer will announce changes in public expenditure and explain how certain taxes are to be raised. That will give us the whole picture. But we are creating an Assembly that will not be concerned with raising money. Its only method of raising money will be to come to the House of Commons and ask for an increase in the block grant. The question of raising the money will not arise. What will be the basis on which the Government will allocate the amount from the national Consolidated Fund to the Welsh Consolidated Fund? We should have some answer about those criteria at this stage of the argument.

Mr. Wigley

I have never heard so much nonsense about Clause 43 as that expressed by the hon. Member for Aberdare (Mr. Evans). I can understand those hon. Members who are opposed to the concept of a Welsh Assembly in total. I disagree with them, but I can understand them. But if there is to be an Assembly and if it is to have any function whatsoever, inevitably it must be involved with finance. If it is involved with finance it is a nonsense to contemplate that it can do that without a Welsh Comptroller and Auditor General or the equivalent.

Like the hon. Member for West Lothian (Mr. Dalyell), I have an interest. I was a controller on the industrial side and I had a large involvement in auditing before coming to the House. The analogy in a multi-layer company having an auditing and controlling function at plant level is apt in this context in that funds are generated at head office and passed out to another locality. To argue that there should not be a controlling and auditing function in an Assembly is to deprive it of one of the main tools needed to do its job. That is because auditing and financial controlling is more than historic accounting. It is the ongoing management of the firm and the thrust of the finance at the disposal of the Assembly in the right direction. If the Assembly is to be able to control the responsibility placed upon it and is to know and monitor the effects of its expenditures it will need these functions.

I know the argument in favour of a purely external auditing function. But there are many more arguments in favour of having an in-built, internal function for an Assembly or any other body than there are for an outside function.

The hon. Member for Cardiff, North (Mr. Grist) said that there would be a total lack of control and answerability towards these funds. But the reality is that although I and my colleagues do not like it, the hands of the Assembly will be tied by the legislation passed in the House of Commons. That legislation will impose requirements on the Welsh Assembly and therefore the degree of variation of priority will be restricted to a large extent.

A degree of variation is worth having. That variation is needed, not to have different standards, as the hon. Member for Aberdare suggested, but to meet the different needs and priorities that exist in Wales. That is the whole concept behind setting up an Assembly of this nature. There are different priorities and needs, either because of the circumstances in Wales or because of the social aspirations of the people of Wales that can best be answered by a body in Wales which is answerable to the Welsh people and which sees the situation at first hand.

Mr. Ioan Evans

The hon. Member is not arguing against the point that I was making. I was saying that at the moment the allocation is made by the Welsh Office, which is answerable to the House of Commons. What we are doing is creating an Assembly that will determine how the money is to be allocated. We shall have arguments about whether the Eistedfodd grant should be larger or smaller. There will be arguments about whether there should be more bilingual road signs. This will involve public expenditure. My point is that we do not know what the amount will be. We must presume that no more funds will be allocated. They will not be larger than they are at present. If the Assembly decides to spend more money on one service than on another, that must be at the expense of the other. Therefore, the standards of education, for instance, which are universal now, could be affected.

Mr. Wigley

I accept that, when there is a limited sum, if more is spent on one service, less must be spent on another. But the reason for that might be that there is a need to spend less. One might need less expenditure to improve a service than one would need under a blanket formula covering the whole of the United Kingdom. That is the whole concept behind the Assembly. We can have the finer brush to paint in the picture rather than the broad brush which is applied by the mechanism that covers the whole of the United Kingdom.

In Clause 43, in the arguments about the need for a Comptroller and Auditor General, we are not arguing about the way in which funds are allocated from Westminster to the Welsh Assembly. That matter is dealt with in different clauses. We are arguing about the method of control, the answerability and the internal mechanisms fur the Assembly to ensure that the payments are in line with ifs own programme and to meet its own needs.

Mr. Dalyell

Could the hon. Gentleman give an example of a change in pricrities for the benefit of the people of Wales which is unseen by the three or four Ministers at the Welsh Office and the 36 Welsh Members of Parliament that would be seen by a Welsh Assembly?

Mr. Wigley

Yes. If we had our way and went towards a full Parliament and full self-government we should have different priorities. For example, we should not be spending the extra £400 million on defence. That is a difference in priority. I am refuting what I believe to be a nonsense expressed by those who say that it is only those who are elected to this Chamber who can decide which priorities suit Wales and not the people who are elected to the Assembly in Cardiff.

Mr. D. E. Thomas

Perhaps I can help my hon. Friend. Is my hon. Friend aware that there has been for at least two years a policy under which the Department of Health and Social Security in England has adopted a scheme of joint financing between the National Health Service and the personal social services of local authorities and that this scheme was not operated in Wales for two years? It was not set up by the Welsh Office. At last the Welsh Office is to begin such a funding, but only at the rate of £200,000 for the first financial year.

Is my hon. Friend aware that had there been a Welsh Assembly it could have decided to have a joint funding scheme between the DHSS and the personal social services earlier than it has. There was resistance from the area health authorities and certain social services departments to this scheme. The Welsh Assembly would have been able to make this type of innovative decision in social policy. That is the kind of switching of resources which would be more effective at the Cardiff level.

5.30 p.m.

Mr. Wigley

Yes, I accept that, of course, and what one hopes is that we shall have more of the innovative role which we are looking for as an advance within the cake at our disposal. We ourselves would like to see much greater control on both sides of the financial equation here, but, given that we are to have only expenditure control within the confines of the Bill, it is vital that the right mechanisms for control of that expenditure be set up, because, if they are not, we shall be back into the worries which have been expressed by certain hon. Members on the Government Benches to the effect that there is inappropriate and insufficient control over vital aspects of public expenditure.

To delete this part of the Bill would be to fall into the very problems which have been argued by certain hon. Members opposite who oppose the Welsh Assembly.

Mr. Neil Kinnock (Bedwellty)

The hon. Gentleman emphasises the need for greater sensitivity in recognising and meeting Welsh needs, and I entirely agree there. But is he not aware of the view expressed by several local authorities that, because of the authority which will be vested in the proposed Assembly, the purposes which they have identified and seek to meet on a local community basis will be impeded or even eroded altogether by the superimposition of a Welsh national body deciding priorities?

Secondly, the hon. Gentleman spoke earlier of the way in which resources could be shifted. Within the group of powers and functions over which the Assembly will have responsibility, can the hon. Gentleman suggest any single sphere in which we could in Wales afford to spend a halfpenny less?

Mr. Wigley

I am, of course, aware of the representations made by local authorities, particularly county authorities. The representations which I hear from district authorities are somewhat different from those of the county authorities, and they appear to be much more in favour of this proposed body, and seeing the arguments as they are put forward, with the county authorities being against the Assembly and the districts generally in favour, one suspects that there is a degree of motivated self-interest related to the preservation of their own existence.

But I take the point which the hon. Gentleman makes, that the local authorities themselves are capable of determining priorities at local level as they see them, and I accept his argument that the local authorities should have that power, for it is important for them to be able to determine the priorities according to their own lights. I am glad to hear the hon. Gentleman argue that since it will presumably lead, as the hon. Member for Aberdare suggested, to a difference in the meeting of needs or in standards, according to the terminology one uses, since they will determine different priorities.

That is what we are arguing about in the context of an all-Wales assembly. At a higher level there is again this type of differentiation, and what we feel very strongly is that the powers for the Assembly must be powers transferred from the centre out to the Welsh Assembly and not centralised from local authorities to Cardiff or wherever the Assembly meets. Devolution, or decentralisation—"datganoli" is the Welsh word, meaning decentralisation—is about moving power from here to Wales, not about moving power from Gwynedd County Council or Arfon Borough Council to Cardiff. To that extent, it gives the capability of the finer tuning to which the hon. Gentleman referred.

Mr. Kinnock

If we are really talking about datganoli, it is not enough to decentralise from Westminster to the Cardiff Assembly, but the real decentralisation should be for making decisions which affect people in their everyday lives which they can recognise and can control democratically, and this comes at the local authority level. Does not the hon. Gentleman recognise that the establishment of the Assembly is a centralising gesture because of the power that it will take away from all local authorities, county and local?

Mr. Wigley

That is not so. That may be the fundamental misconception which the hon. Gentleman has harboured all along, and it may explain his opposition to the Bill. There is not a centralising function here. Certainly, Cardiff is taking over certain roles vis-à-vis local authorities which have previously been undertaken by Westminster, but that is not a centralising from local authority to Cardiff, and what we are obtaining here—

The Chairman

Order. We are getting into a geographical argument now, and we ought to be directing our attention specifically to payments out of the Welsh Consolidated Fund.

Mr. Wigley

I take the hint, Mr. Murton. Hon. Members opposite are free to argue and to vote against having an Assembly, both on Second Reading and on Third Reading, but if we are to have an Assembly and if it is to have a meaningful function, that function must be tied up with finance, and, if it is tied up with finance, there must be within its own ambit the functions of a Controller and Auditor General. Otherwise, the whole thing is meaningless.

Mr. Raison

The hon. Member for Caernarvon (Mr. Wigley) has been talking about the relationship between the centre and the locality with reference to financial control, and I wish to develop that point. However, I wish first to echo the words used by my right hon. Friend the Member for Cambridgeshire (Mr. Pym) in opening the debate by saying that I think that the attitude of the Minister of State at the Treasury yesterday was both contemptuous and contemptible. He came to the Chamber looking rather like a lofty Treasury mandarin, which, no doubt, he is, seeming to think that he had been hearing a lot of rubbish the whole afternoon and did not much like it.

The right hon. Gentleman's behaviour was deplorable, and I would much rather have heard the other Minister of State, his hon. Friend at the Privy Council Office, but I imagine that the reason why he was not rolled out then was that he had had such a depressing visit to Garscadden the day before. Indeed, The Daily Telegraph tells us that he trotted up and down the graffiti-ridden staircases in Garscadden with dogs and walling children"—

The Chairman

Order. The hon. Gentleman must come away from another part of the United Kingdom and deal with Clause 43.

Mr. Raison

I say only that devolution will not win a single vote for Labour when the by-election comes, and I shall not pursue that.

The Minister of State, Privy Council Office (Mr. John Smith)

Even though he may be ideologically in tune with The Daily Telegraph, the hon. Gentleman ought by now to know enough not to believe much that he reads there. That is a total distortion of what happened.

Mr. Raison

I am afraid that I cannot accept that, and I believe the truth to be that the Scotland Bill is completely unloved in Scotland as the present Bill is in Wales. However, as you are about to say. Mr. Murton, we are discussing the financial relationships here, and I wish to pick up what I regard as an important point.

In lines 9 to 12, the clause sets out the circumstances in which the Welsh Comptroller and Auditor General shall grant payments, and he shall not grant them unless any sum has been charged on the Fund by or under any Act of Parliament, or is part of the sums appropriated for any purpose by an order of the Assembly. It is important to understand what that means, and in this context I shall refer to an important aspect of economic policy, namely, incomes policy, in order to illustrate what I mean. I am glad that we have a Minister from the Treasury here.

The clause tells us that sums can be granted if there is an Act of Parliament allowing it or if the Welsh Assembly allows it. Under the sort of incomes policy which we have nowadays, the Government do not, by and large, proceed by Act of Parliament but they set the policy out in a White Paper which may or may not subsequently be presented to the House of Commons for approval. That is the way the Government have chosen to operate during the past year. Sometimes they have chosen to operate without even a White Paper, taking as authorisation, so to speak, a vote of the House of Commons.

The examples which I give to illusstrate that are as follows. There has been the range of incomes policies covered by White Papers and subsequently, in some cases, though only in some, converted into legislation under the 1975 Act, but there is also the question of the contract clauses which are meant to reinforce the incomes policy. Apparently, the Government are simply relying on the fact that a resolution or vote of the House of Commons will give some sort of validity to their actions.

The question I would like to put to the Minister of State is this: "When he is deciding whether it is proper for sums to be paid will the Comptroller and Auditor General rave to pay any regard at all to the national incomes policy of the day?" It is one of the very regrettable facts about both this Bill and the Scotland Bill that the guillotine prevented any discussion of the clauses in which the Government originally wanted the Assemblies to have regard to the national incomes policy.

The Scottish clause was chucked out, and yesterday the Government allowed, without opposition, the Welsh clause about incomes policy to be chucked out. It is a great pity that it was not debated, because there was no chance to discuss the reasons why the clauses were chucked out. Some people liked their being chucked out because they did not want any incomes policy and others because they believed that they were far too weak to enforce an incomes policy. I do not want an incomes policy, but if we have one it must apply to Scotland and Wales. Therefore, if we unfortunately have an incomes policy, it is ridiculous that Scotland and Wales, through their Assemblies, should be exempted from incomes policy.

One of the most astonishing things about the Government's policy is that they should be prepared to say, for example, as I understand it, that the firemen in Scotland or in Wales should have been allowed to be paid 20 per cent. more when the firemen in England were being paid 10 per cent. more. That is extraordinary. It is now evident that under the Bill the odious contract clauses that the House of Commons has discussed on two occasions would not apply to the Welsh Assembly. If the Government in London are saying to their various agencies "You must insist whenever a contract is given that those who receive it must agree to these incomes policy clauses", is it conceivable or acceptable that the Welsh Assembly should not have to apply the same clauses?

Mr. Wigley

Surely the point is that if one has an incomes policy—and we have great reservations about the sort that we have had—it should preferably be one that has come through a Bill or other legislation in the House of Commons, rather than one that has been working on an ad hoc basis, as we have seen in the recent past. If that is the case, the legislation from here covers Wales anyway—regrettably, from our point of view.

Mr. Raison

I entirely agree with the hon. Gentleman. I entirely accept that if we are to have an incomes policy it should come through a statute. But I have also to recognise that we have by and large a non-statutory incomes policy. This is where the Government have landed us. Unless the Minister of State corrects me, I am sure that I am accurate when I say that the incomes policy provisions operated in England would not, in respect of devolved matters, apply to the activities of the Welsh or Scottish Assemblies.

I ask the Minister of State, who presumably is concerned with national economic policy, how on earth he thinks that that could ever be acceptable or tolerable. Perhaps I should have brought this up on the earlier clauses to do with incomes policy, but they have never been reached, and I think it entirely proper that I should bring it up now.

If you would like me to revert more specifically to the subject matter of the clause, Mr. Murton, may I ask this. Would the Welsh Comptroller and Auditor General when sanctioning or approving these sums of money, or doing whatever it is with them, have to bear in mind the Government's incomes policy, or would he simply say "The Welsh Assembly can help itself"?

There is one other twist to this which I have half touched on already and which is very interesting and important. The clause clearly says that if the sum of money is granted under any Act of Parliament, it is all right. We all understand that, but, as I have already implied, the present Government do not always proceed by Act of Parliament. They like to proceed by other methods including pushing a vote through the House of Commons, maybe endorsing a White Paper or whatever.

Should the Comptroller and Auditor General take note of policies that have been pushed through the House by a White Paper, or policies such as the one about the contract clauses, to which I have already referred, when the Government, alas, received a majority? Should the Welsh Comptroller and Auditor General pay attention to that, or should he simply be bound very strictly to the letter of what I agree with the hon. Gentleman should properly be the case—in other words, working through the law?

These are very important, fundamental questions in the whole problem of devolution. It would be a travesty of our proceedings if at no stage—as happened on the Scotland Bill—a Minister told us how the Government saw incomes policy operating in the Welsh Assembly situation and the Scottish Assembly situation.

5.45 p.m.

Mr. Wyn Roberts (Conway)

This point has been troubling me as well. Does my hon. Friend agree that according to one interpretation the Assembly can spend only money which has been approved under or by an Act of Parliament? Nevertheless, there is the other possibility that it may, as Clause 43 says, spend sums appropriated for any purpose by an order of the Assembly". But I cannot see that the Assembly can make an order that does not have some backing in an Act of Parliament.

Mr. Raison

My hon. Friend has raised a very important point. I do not think that it is for me to comment on it, because it is an issue of clarification, but I hope that the Minister will pay attention to that as well as to what I believe to be the very important points that I have made.

Mr. Ian Gow (Eastbourne)

It is, I think, common knowledge that the Minister of State, Treasury, is no enthusiast for devolution to Wales [HON. MEMBERS: "Oh."] It seems very curious that the right hon. Gentleman should have been wheeled in to deal with this debate, because, particularly at this time of the year, he should have many more important things to deal with.

Mr. Dalyell

My right hon. Friend is, alas, only too enthusiastic.

Mr. Kinnock

May I come to the firm defence of my right hon. Friend. Devolution occupies a place in his heart second only to the fortunes of Llanelli. Rugby Football Club.

Mr. Gow

There is one aspect—[HON. MEMBER: "Withdraw."] I certainly will not withdraw. There is one aspect of Clause 43 to which I wish to draw the Committee's attention. There can be no payment under subsections (2)(a) or (b) unless that payment is made at the prior request of the Executive Committee of the Assembly". If there is no request of the Executive Committee, there can be no payment. That seems to me an extraordinary provision.

In Clauses 18 and 19 we find the Committees that are to be set up. We see that the Executive Committees consists of the leaders of the Committees appointed under Clause 18 plus a third nominated by the Assembly. Is it the case under Clause 19 that the one-third members of the Executive Committee who are not leaders of the other committees must be Members of the Assembly? If I read Clause 19 correctly, those one-third who are not there ex officio do not have to be Members of the Assembly.

It seems to me another recipe for potential conflict and the potential unworkability of Clause 43 that there can be no payment out unless there has first been a request from the Executive Committee. I believe that it would be perfectly reasonable to have the approval of the Assembly, which is indeed required, but I cannot see the reason for having to have the prior request of the Executive Committee.

Mr. Denzil Davies

Perhaps I may deal first with a specific question asked by my hon. Friend the Member for West Lothian (Mr. Dalyell), of which he gave me notice, about the mechanism and the operation of the office of Welsh Comptroller and Auditor General. My hon. Friend asked whether the present Comptroller and Auditor General had been consulted. His officials were consulted upon the general mechanism laid down in the Bill, as other Government Departments were consulted in relation to many parts of the Bill. The answer to my hon. Friend's question is that indeed they were consulted, and they advised the Government accordingly.

My hon. Friend also made some interesting remarks about the Public Accounts Committee, of which I had the fortune to be a member for a short time. Indeed, I was fortunate enough to be a member when the vexed subjects of the Taff Vale road and the hospital laundry services of L. G. Jones were discussed. It is a very important Committee, as I am sure my hon. Friend agrees, which plays a very important part in controlling public expenditure.

I was somewhat disappointed by my hon. Friend's conservative attitude towards the kind of Comptroller and Auditor General Department, if it can be so described, that will be set up by the Welsh Assembly. Our PAC and Comptroller and Auditor General do a very good job. Other countries have similar kinds of institution, but sometimes operate them on a different basis. For example, there is a lot to be said for the way in which the French discharge this function. The Americans have a different set-up. My hon. Friend talked of expertise. When one compares our system with some of the Continental systems, especially the French system, one finds, if I may say so without being disrespectful, that in those systems there is as great expertise as, if not greater expertise than, our own.

The Bill, giving the machinery and legislative authority for the setting up of the Welsh Assembly, rightly leaves it to the Assembly to determine the details of the kind of Comptroller and Auditor General's Department that it wants. It is not for me to say, but for the Assembly, but I hope that it will look not only at our example and learn from our experience but at other legislatures. Indeed, I believe that we in this House can also learn from the way in which other legislatures deal with the problem of financial control.

Mr. Dalyell

May I ask one point of clarification? Is the career structure of the Comptroller and Auditor General's Departments in Edinburgh and Cardiff to be separate from the Comptroller and Auditor General's Department as we know it? Is it to be a separate career structure and organisation?

Mr. Davies

The career structure will be determined as one of the details when the Department is being set up. There may well be a case for having a different career structure. The career structure of the present office is not perfect, as I am sure my hon. Friend agrees. If he has talked, as I am sure he has, with various Comptrollers and Auditors General, he will realise that there is a problem in relation to career structure.

There is also a problem—here I accept what my hon. Friend says—about getting the right expertise for this kind of work. There is not a limitless supply of people qualified to do the kind of in-depth analysis necessary in this kind of situation. So I do not think that the Assembly will be backward—I hope that it will not—in setting up a department able to meet these needs and able to provide the kind of financial control that we all want to see.

My hon. Friend talked about hiving off the office of Comptroller and Auditor-General. It is a case not of hiving off but of setting up a body that will scrutinise the spending of money by the Assembly according to the powers laid down by Parliament. It is not a case of hiving off the work at all. The Public Accounts Committee will still have plenty of work to do, even in relation to Wales, because many functions will remain with the Welsh Office and Ministers will remain responsible to this House and to the PAC.

Mr. Wyn Roberts

Does not the right hon. Gentleman think that there is un-wisdom in having one Comptroller and Auditor General accounting for payments out of a fund and another Comptroller and Auditor General vetting payments into the same fund?

Mr. Davies

Not at all. Two institutions are involved. The House of Commons will continue to have its own Comptroller and Auditor General, who will deal not only with payments into the Welsh fund. The Assembly will pay out money, and it is logical that it should have a Comptroller and Auditor General—the hon. Gentleman can call the office something else if he does not like the Norman French. But, as the hon. Member for Caernarvon (Mr. Wigley) said, their has to be such a person, and we have to call him something. I see nothing unwise about this. Indeed, I think that it is a wise thing to do.

I turn now to the point raised by the right hon. Member for Cambridgeshire (Mr. Pym), who returned to a question which we dealt with yesterday. The hon. Member for Conway (Mr. Roberts) also raised it. It is a valid point. The right hon. Gentleman asked about the money, the credits or debits, which are to be transferred and are to appear in the two different bank accounts—the Welsh Loans Fund and the Welsh Consolidated Fund. The hon. Member for Barry (Sir R. Gower) asked what there was to ensure that the money can be used only for the purposes for which it is granted.

I come back to the provisions in the Bill which make the position clear. Clause 43(2) says: The Welsh Comptroller and Auditor General shall grant credit on the Welsh Consolidated Fund at the request of the Executive Committee of the Assembly, but shall not grant any such credit for the payment of any sum unless that sum— (a) has been charged on the Fund by or under any Act of Parliament, I think that we can disregard that for this purpose because it would be a specific charge as we now have specific charges on the United Kingdom Consolidated Fund. There might be, in certain cases, specific charges, but this has nothing whatever to do with incomes policy, although the hon. Member for Aylesbury (Mr. Raison) seemed to think that it might have. If there is a specific charge, that is an end to the matter.

The wording of subsection (2)(b) is what we are concerned with here. It says: is part of the sums appropriated for any purpose by an order of the Assembly; Subsection (2) goes on: and no sum issued out of the Welsh Consolidated Fund on credits granted under paragraph (a) or (b) above shall be applied for any purpose other than that for which it is charged or appropriated In other words, the Welsh Assembly cannot appropriate any Consolidated Fund payments except for purposes for which those payments have been paid into the Consolidated Fund. Block grant money cannot be used for anything except block grant purposes. The Assembly can order or ask the Comptroller and Auditor General to make a payment, but he can grant the credit only if he is satisfied that the Assembly is making the payment for the purposes for which the money was allowed. The same applies to the Welsh Loans Fund. There is no question of money being paid for other purposes. It cannot be paid for other purposes without connivance or an attempt not to operate the provisions of the legislation.

Mr. Brittan

If, under Clause 42(2), money has been passed from the Loans Fund to the Consolidated Fund, and it is then to be found in the Consolidated Fund, why is it in any way illegal for the Assembly itself to authorise the expenditure of that money, which is now to be found in the Consolidated Fund, for purposes for which sums in the Consolidated Fund may properly be spent?

Mr. Davies

Because the money in the Consolidated Fund, which is initially put into the Fund for block grant purposes, remains in the ownership of that Fund until the ownership changes, and the only way in which the ownership changes or can be changed is by credit being given and the money being paid out to another party. The ownership of that money does not change merely because the surplus in the Consolidated Fund is reduced and the deficit in the Loans Fund—I put this for the sake of argument—is also reduced. But that is merely a book-keeping transfer between two bank accounts. The character of the money remains the same.

Hon. Members still look surprised. I say to them without commitment that if, as it appears, they are still not convinced, we are prepared to look at this again to see whether it is possible to make it clearer. It is not the purpose of this part of the clause to enable money to be used for other purposes. We are as keen as hon. Members are to ensure that that is the case. Without commitment, we shall consider what has been said in the debate and whether the provision can be made clearer. I must add, however, that I think that it is clear now, as I am sure hon. Members will agree, on reflection.

Mr. Ioan Evans

My right hon. Friend referred to the appointment of the Welsh Comptroller and Auditor General, but we will not be able to debate Clause 51, relating to that appointment, when we come to it. Subsection (4) of the clause provides that The Welsh Comptroller and Auditor General shall not be a Member of the House of Commons or of the Welsh or Northern Ireland Assembly. There is no reference to the Scottish Assembly. Is that because the Scotland Bill is not yet an Act and there will be amending legislation eventually to cover the point?

Mr. Davies

My hon. Friend is right, of course. There is no Scottish Assembly at the moment, so the draftsman could not be expected to draft such a provision. What will happen over the next

few months, however, is another matter. That is why it is drafted in this way. The clause is mainly concerned not with the Welsh Comptroller and Auditor General but with the payments of moneys out of the Welsh Consolidated Fund. It sets out stringent safeguards to ensure that money is used for the purposes for which it is granted. The setting up of a Comptroller and Auditor General strengthens that system. I hope that the Assembly will look at procedures in other countries, because we in this House have a lot to learn about the best way of controlling public expenditure.

I hope that I have dealt with most of the points. I have not covered the incomes policy point, because—

It being Six o'clock, The CHAIRMAN proceeded, pursuant to the Order [16th November] and the Resolution [1st March], to put forthwith the Question already proposed from the Chair.

Question put, That the Clause stand part of the Bill:—

The Committee divided: Ayes 169. Noes 134.

Question accordingly agreed to.

Clause 43 ordered to stand part of the Bill.

The CHAIRMAN then proceeded to put forthwith the Questions necessary for the disposal of the Business to be concluded at Six o'clock.

Clauses 44 and 45 ordered to stand part of the Bill.

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