Fiscal Responsibility Bill

I want to address the points about pace and flexibility before I give way again. First, however, I want to respond to some of the comments made by the hon. Member for Stone (Mr. Cash)—and, indeed, by the hon. Member for Braintree (Mr. Newmark)—about Government accounting. I shall not go into a huge amount of detail, as the issue is not directly relevant to the clause. As is well known, however, following our moves towards a system of resource accounting and budgeting, we have been operating in accordance with new international financial reporting standards. We also report under the Maastricht treaty—the hon. Member for Stone does not like the treaty, but we have a legal responsibility to report under it—using the ESA95 rules. There are differences between those rules and international financial reporting standards. Rather than trying to put the two together and say that there can be only one right set of accounts, we should ensure that there is proper transparency and that information is available. so that those who examine these matters closely can understand what is going on. The hon. Member for Stone referred to public sector net borrowing. It is defined in the code for fiscal stability. A revised code was published yesterday, a copy of which is in the Library of the House. Finally, let me deal with the question of whether financial interventions should be included in the Government's accounts. I ask the Committee to consider for a moment whether it is realistic to include all the assets and liabilities of Royal Bank of Scotland in the Government's accounts, perhaps on a line-by-line basis, or whether it is better to treat them as a separate entity. When I was running an investment company with investments in a range of companies, I found that, if one owned more than 50 per cent. of the shares, line-by-line consolidation produced a very distorting picture of the overall financial position of the organisation. I believe that clarity and transparency are important, and we in the Government are very clear about what we are doing. We expect the financial interventions that we have made to be temporary. We have no desire to own Royal Bank of Scotland for a long period; we want, over a sensible period and when it means value for the taxpayer, to divest ourselves of our stake in it. It simply does not make sense to take some of the actions that Opposition Members have suggested in terms of accounting treatment, and the same applies to pensions. My hon. Friend the Member for South Derbyshire (Mr. Todd) made several good points in rebutting some of the arguments advanced by the hon. Member for Braintree. We can probably argue about different definitions of national accounts until the cows come home. What is important is proper transparency, enabling those who examine financial accounts under different accounting conventions to understand what is going on. These matters can be quite confusing for the public. However, it is important for us to meet our legal commitments under the Maastricht treaty by reporting under the ESA95 rules, and also important for us to apply international financial reporting standards.