Constitutional Reform and Governance Bill

In which case, Sir Alan, I shall make those points now. This part of the Bill, as the Father of the House has said, is predominantly to do with the governance of the NAO and the CAG, and there is a combination of continuity and change in the new arrangements. I think it would be fair to provide a little background on how we got into this situation and why there was a need to look again at the governance of the CAG—doubtless the Chairman of the PAC, my hon. Friend the Member for Gainsborough (Mr. Leigh), and the Father of the House will say things to the same effect. We cannot ignore the fact that there was some adverse publicity regarding the expenses of Sir John Bourn, who was CAG for some 20 years or so. It is a great pity that there was a cloud over the last few months of his service, because he was a distinguished Comptroller and Auditor General. He did much to enhance the reputation of the National Audit Office and worked very effectively with the Public Accounts Committee. Nevertheless, there was some concern and adverse publicity over his expenses, which in many respects led to the commissioning of the Tiner review and various recommendations made as to the governance of the Comptroller and Auditor General and the NAO. I wish to make various points about corporate governance at a later stage, but two points are appropriate to address in the context of clause 37. The first is the length of term of the Comptroller and Auditor General, and the second is the appointment process. Clause 37(7) provides that the length of term should be 10 years and subsection (8) provides that it should be non-renewable. We welcome those provisions. The tension that exists in the Government's arrangements in this area relates to independence and accountability, and that is a point to which we may return later. However, a non-renewable term of a reasonable length gives the CAG a degree of independence. The Tiner review initially suggested eight years, and we now have 10 years in the Bill. No doubt others will explain the reason for that change, but it is not enormously significant. We welcome those provisions. The issue of the appointment process has been touched on recently in a couple of debates when new Comptrollers and Auditors General have been appointed. I have had the opportunity to speak in both debates—first, on the temporary appointment of Mr. Tim Burr in January 2008, and secondly, on the appointment of Mr. Amyas Morse as the permanent CAG. The debate has centred on whether the existing structure, which has been in place since 1983—by which time the appointment was made by a combination of the Chairman of the Public Accounts Committee and the Prime Minister—is appropriate or whether Parliament should have a wider role, and remove the Prime Minister and the Executive from the process, either altogether or with a diminished role. Another issue is whether pre-appointment hearings should be introduced. This is not a new debate. In the debate that took place when Sir John Bourn was appointed, the Parliamentary Secretary to the Treasury, the right hon. Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown), then the Opposition spokesman, said, on the question of a greater role for Parliament:""The Labour party intends to give effect to this principle when in government."—[Official Report, 16 December 1987; Vol. 124, c. 1201.]" The argument for that approach is that we should have greater parliamentary involvement in public appointments. It is an argument that the Prime Minister espoused in his very first statement to this House as Prime Minister. It is one with which I have some sympathy, as it seems to be a more democratic approach, but there are specific arguments that apply in this context that suggest that the continuation of the present system may be a sensible approach. The first argument is that the Chairman of the Public Accounts Committee is a member of the Opposition. That is a long-standing convention, and one that I am sure will continue. The Chairman has a substantial role in determining an appointment. In fact, by and large, as I understand it, in practice the Chairman essentially makes the selection, which is then approved by the Prime Minister. It is important that the CAG is seen as independent of the Executive, and an appointment made by a senior Opposition Member demonstrates an important degree of independence.