PAYMENTS OUT (Hansard, 24 July 2000)

§ The Economic Secretary to the Treasury (Miss Melanie Johnson)
I beg to move, That this House agrees with the Lords in the said amendment.

§ Mr. Deputy Speaker (Sir Alan Haselhurst)
With this it will be convenient to discuss Lords amendments Nos. 2 and 3.
I draw the House's attention to the fact that privilege is involved in Lords amendments Nos. 3 to 15, 17 to 23 and 26. If the House agrees to any of these Lords amendments, I shall ensure that the appropriate entry is made in the Journal.

§ Miss Johnson
The amendments provide for a new clause to replace clause 4 and minor consequential amendments to clause 3. The amendments have been agreed by the National Audit Office. They would permit the Treasury to repay, with the agreement of the Comptroller and Auditor General, money that should not or need not have been paid into the Fund and "the Fund" is now defined to include the National Loans Fund as well as the Consolidated Fund.
A specific statutory power is needed to make any payment out of the Consolidated Fund or the National Loans Fund. In addition, all such payments, except transfers between the two funds, require the prior approval of the Comptroller and Auditor General, technically known as "credit" or authority to pay. That presents a problem when sums are credited to either fund in error and should be repaid.
As the law stands, there is no power to repay any sums that are paid into either the Consolidated Fund or the National Loans Fund, but should not have been. Any such sums are effectively imprisoned inside the fund concerned. That has occasionally caused problems, so the Government believe that it would be sensible to provide a power to refund such sums from the National Loans Fund and the Consolidated Fund.
As our original intention was simply to modernise the Exchequer and Audit Departments Act 1866 relating to the Consolidated Fund, we originally sought only a power to repay sums credited in error to the Consolidated Fund. The main example that we had in mind was where Departments surrender receipts which they believe are surplus to their needs, but which they subsequently find they need to avoid incurring excess votes. However, other payments could be credited to the Consolidated Fund in error, so we sought a general power to repay sums credited in error to the Consolidated Fund. That is what clause 4 provided for prior to the amendments being made.
We decided to amend the clause for two reasons: first, a similar power was needed for the National Loans Fund; 826 and, secondly, discussions with the National Audit Office and our lawyers have led us to conclude that the term as the result of an error would not have provided the desired degree of flexibility; hence the new formulation should not or need not have been paid into the Fund.

§ Mr. Oliver Letwin (West Dorset)
I can give our response in one word: agreed.