RAILWAY AUDIT BILL. (Hansard, 4 March 1850)

§ EARL GRANVILLE

said, that it would be in the recollection of their Lordships that in reply to a question which had been put to him by a noble Lord at the commencement of the Session, as to the intentions of Ministers with respect to the introduction of a Railway Audit Bill, he had stated that Her Majesty's Government was waiting to know what course would be adopted by the great body of railway directors, or of other persons representing the great aggregate of railway proprietors, in proposing a measure of that description. As it did not appear likely that the railway directors would introduce the measure which, in the course of last Session, they declared their intention to introduce, and as it did not appear likely that any large number of railway proprietors would combine to bring in any Bill of that kind during the present Session, it did not appear right to the Government to delay any longer the task of informing the public of the 294 course which Her Majesty's Ministers proposed to pursue. He now proposed the first reading of a Bill to provide for the Audit of the Accounts of Railway Companies. It was usual for their Lordships to assent to such Motion as a matter of course. It would be very inconvenient if he were at that moment to enter into any statement or argument to show either that the mode of railway audit formerly proposed was not a good one, or that the mode now proposed by the Government was the best. He should therefore confine himself to the explanation of the principal provisions of his Bill. The object of it was to secure, with the smallest amount of interference, an independent and continuous audit of railway accounts. Instead of the present system, by which each company selected its own auditor, it was proposed to establish a permanent central board, which should make a continuous audit of all the railway accounts in the kingdom. The machinery to work the board would be as follows:—Each railway company should, at the first special general meeting of its proprietors, after the 1st of January, 1851, elect one delegate. These delegates, after due notice given, should proceed to elect their chairman. Their votes should be in proportion to the capital paid up by the respective companies which they represented. The company which had not paid up 2,000,000l of capital should have one vote; the company which had paid up above 2,000,000l., and not less than 5,000,000l. of its capital, should have two votes; the company which had paid up above 5,000,000l., and not loss than 10,000,000l. of its capital, should have three votes; and the company which had paid up above 10,000,000l. should have four votes. These delegates would, as he had before said, proceed to nominate their chairman, and also two other members of the Board for Auditing Railway Accounts. When elected, the members of the board would be irremoveable, except by a vote of two-thirds of the delegates, sanctioned by the Board of Railway Commissioners. It was proposed that this Board of Audit should be obliged once in every half-year to make a report to each company on these points—whether their financial transactions were regularly organised; whether their accounts of receipt and expenditure were rightly set forth; whether the heads of capital and of dividend were distinctly set apart; whether the dividends declared were or were not injurious to the railway 295 companies; and whether the law charges were correctly taxed or not. It was also proposed that they should place their reports before Parliament at the beginning of each year. Powers would also be given to this Audit Board by his Bill to make a continuous auditing of the different railway accounts, and to call upon all the railway officers to give them every assistance in the execution of their duties. Powers would also be given them to inspect all books, papers, documents, and vouchers to enable them to form a perfect balance-sheet of the receipts and expenditure of each and every company. It was proposed that the expenses of the Audit Board should be repaid in this manner: 10,000l. was, in the first instance, to be subscribed among the various railway companies, and would be paid into an account opened for it in the Bank of England. It was proposed that the expenditure of the board should be audited in the same way as the expenditure of the country. The members of the Audit Board would have to prepare an account of their expenditure for each half-year, to be audited by the Auditors of Public Accounts. It would be open to the different railway companies to object to that account through the medium of a majority of the delegates; and the appeal was to be to the Board of Railway Commissioners, whose decision on all points would be final. These were the principal features in the Bill to which he wished to call the attention of their Lordships. He had not entered into any argument on the various provisions which he had announced to their Lordships, because he did not want to do anything which might promote discussion prematurely on the merits or demerits of his measure. He concluded by moving that it be read a first time.