Nid ydym yn gwybod a yw'r ymateb mwyaf diweddar i'r cais hwn yn cynnwys gwybodaeth neuai peidio - os chi ywAndrew Berkeley mewngofnodwch a gadael i bawb wybod.

What are NLF credits used for?

We're waiting for Andrew Berkeley to read recent responses and update the status.

Dear Her Majesty's Treasury,

Under the Exchequer and Audit Department's Act 1866 sections 13 and 15, services payable out of the Consolidated Fund are granted credits by the Comptroller and Auditor General. These credits can be cashed at the Bank of England under Treasury orders (sections 13(3) and 15(3) of the 1866 Act).

Under the National Loans Act 1968, the National Loans Fund can be similarly granted Comptroller credits for services payable. It is less clear how such credits are used to make payments on behalf of the latter fund. Section 15 of the 1968 Act makes it clear that National Loans Fund interest payments are to be made directly out of the Consolidated Fund and they therefore constitute a Consolidated Fund Standing Service. Such payments can be adminstered via the 1866 Act section 13 therefore. Other payments from the National Loans Fund are not, apparently, Consolidated Fund Standing Services, but do have "recourse to the Consolidated Fund" according to the 1968 Act.

I have the following questions:

1. How are the credits granted by the Comptroller and Auditor General on the National Loans Fund used to facilitate payments? Are they cashed with the Bank of England as with Consolidated Fund-associated credits?

2. Are general payments from the National Loans Fund (e.g. loans issued, principal repayments on borrowing) facilitated via the Exchequer and Audit Departments Act 1866 Section 13 by virtue of the "recourse to Consolidated Fund" qualifer?

3. If the answer to 2 is "yes", why are such payments not described as Consolidated Fund Standing Services in, for example, the Consolidated Fund accounts?

4. If the answer to 2 is "no", which other situations is the "recourse to the Consolidated Fund" used?

Yours faithfully,

Andrew Berkeley

eCase@hmtreasury.gov.uk on behalf of FOI Requests, Her Majesty's Treasury

Our ref: FOI2021/08777

Dear Andrew Berkeley,

Thank you for your request for information which we are considering under
the terms of the Freedom of Information Act 2000.

This is to confirm receipt of your request and to let you know that it is
receiving attention. If you have any enquiries regarding your request do
not hesitate to contact us.

Please note: HM Treasury has a dedicated email address for the public to
make Freedom of Information requests: [email address]

Yours sincerely

Information Rights Unit | Correspondence and Information Rights | HM
Treasury, 1 Horse Guards Road, London, SW1A 2HQ [1]www.gov.uk/hm-treasury

Correspondence and Information Rights | HM Treasury, 1 Horse Guards Road,
London, SW1A 2HQ [2]www.gov.uk/hm-treasury

References

Visible links
1. http://www.gov.uk/hm-treasury
2. http://www.gov.uk/hm-treasury

Dear [email address] on behalf of FOI Requests,

In relation to FOI request FOI2021/08777,

Some additional context may help. The Finance Act 2008 includes a description on the payment mechanisms from the Consolidated Fund and National Loans Fund respectively. See section 159(2) and (4):

https://www.legislation.gov.uk/ukpga/200...

The mechanism described for the Consolidated Fund (159(2)) is similar to that described in the Exchequer and Audit Departments Act 1866 (s13 and s15) and it is clear how such payments are realised via HMT accounts at the Bank of England. The mechanism described for the National Loans Fund (159(4)) is different, does not involve an order to the Bank, and involves a "payment" rather than an "issue". In these respects it is consistent with the National Loans Act 1968.

Please answer the following questions, which can be considered to be part of the original request if that is more convenient:

1. Why does spending out of the Consolidated Fund require an order to the Bank but spending out of the National Loans Fund does *not*?
2. Does the spending out of the National Loans Fund ultimately result in an order to the Bank by virtue of the "recourse to the Consolidated Fund" qualifier in the National Loans Act 1968?
3. What is the difference between a "payment" and an "issue"?

Yours sincerely,

Andrew Berkeley

FOI Requests, Her Majesty's Treasury

1 Atodiad

Dear Andrew Berkeley

Please find attached a response to your recent FOI request.

Kind regards

Information Rights Unit

| HM Treasury | Ground Orange | 1 Horse Guards Road, SW1A 2HQ |
[1]www.gov.uk/hm-treasury

References

Visible links
1. http://www.gov.uk/hm-treasury

Dear Her Majesty's Treasury,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Her Majesty's Treasury's handling of my FOI request 'What are NLF credits used for?'.

HMT has invoked invoked sections 29(1)(a) – prejudice to the economic interests of the UK or any part of it – and 31(1)(a) – prejudice to the prevention or detection of crime – of the Freedom of Information Act in response to several questions relating to the legal basis and mechanisms via which expenditure is issued from the National Loans Fund. This is considered to be unjustified and is challenged on the following grounds.

The questions relate to the ways in which Exchequer credits are applied in the administering of the National Loans Fund. The concept of Exchequer credits is several centuries old and not a secret. It has been the legislated mechanism upon which issues from the Consolidated Fund have been administered for close to two centuries and probably longer. The mechanisms by which such credits operate and their relationship to the Bank of England have been the subject of several detailed and publicly available descriptions, not least from official channels such as the Exchequer Regulation Act of 1834, the Committee on Public Monies of 1856-57, the Exchequer and Audit Departments Act 1866 (which still governs the Consolidated Fund today) and the Treasury Minute of 1867 pertaining to the 1866 Act. Further detailed descriptions on how Exchequer credits are transmitted between the Exchequer, the Pay Offices (e.g. Office of Paymaster General) and the Bank of England have been provided through the last century, for example:

- United States National Monetary Commission (1910), Report to the National Monetary Commission on the Fiscal Systems of the United States, England, France, and Germany, National Monetary Commission, Government Printing Office, Washington.

- von Philippovich, E. (1911), History of the Bank of England and its Financial Services to the State, National Monetary Commission, Government Printing Office, Washington.

- Higgs, H. (1914), The financial system of the United Kingdom, MacMillan and Co., London.

- Young, E.H. (1936), The System of National Finance (3rd ed.), John Murray, London.

- Ulph, C. (1985), 150 Not Out: the history of the Paymaster General’s Office, HM Paymaster General’s Office, Crawley.

It is worth noting that the last item on that list was published directly by the Office of the Paymaster General. It is, therefore, quite clear how the Consolidated Fund enables government expenditure authorised by Parliament to progress through the Exchequer, the pay office (now Government Banking Service) and the Bank of England. The governing legislation has not changed functionally since these texts were written except for the enabling of Exchequer credits to be transmitted via modernised technology by the Government Resources and Accounts Act 2000. The descriptions are therefore, for all legal intents and purposes, current. This information, being publicly available, apparently poses no risk to national economic security or the possibility of crime, nor did it pose such a threat at any time in that last two centuries.

The National Loans Fund was established in 1968 and functions essentially as a subset of the Consolidated Fund. There was no intention, in 1968, of fundamentally changing the nature of government finance, and the NLF was introduced solely as a way of separating aspects of the Consolidated Fund's accounts as emphasised, for example, in this debate at the time:

https://hansard.parliament.uk/Lords/1968...

The NLF remains a functional dependent of the Consolidated Fund today. There is no justification, therefore, for considering the mechanics of the Consolidated Fund to be admissible to the public but the same information as applied to the National Loans Fund to pose quantitatively or qualitatively different risks. Indeed, given the subordinate nature of the NLF and the fact that the Consolidated Fund is paramount in legislation and function, this is obviously flawed logic.

Other publicly available information includes tendering documents for Exchequer Funds and Accounts management systems, such as those for ACME and GRACE, and which are published under the “Central Government Transparency Guidance Note” criteria. The specification (freely available, e.g. “Full details of the requirements are included in the specification document attached to the eSourcing event”) in these tenders describes much more detail about internal Exchequer processes than I am requesting and this, additionally, serves to demonstrate that the request does not endanger the Exchequer in any way beyond information that is already freely available.

I note HMT’s claim: “We consider that this information, crucially when combined with other information, could aid criminal intent against the Government’s banking operations and in turn prejudice the economy”. This fails the prejudice test required by Section 31, which states that “The prejudice claimed must be real, actual or of substance” and “if the harm was only trivial, the exemption would not be engaged”. Since the above cited texts and tenders have not been redacted or eliminated it follows that the harm associated with the subject matter at hand is trivial or less. Additionally HMT is required to “demonstrate a causal link between the disclosure and the harm claimed”, which they have not.

The Section 29 exemption concerns “the effect on the economy rather than the government’s ability to manage the economy”. It is concerned with information “that would damage the economy of the UK”. It is similarly subject to the prejudice test: “there must be a real and significant likelihood of prejudice occurring”, which again if it were the case would have led to the redaction of the texts and tenders quoted above and the prevention of further publications. Further “...public authorities withholding information on the grounds that it would damage the economy must be able to explain how the harm would arise and why it is likely to occur to both the applicant and the Commissioner, based on the particular circumstances of each case”, which, again, HMT have not. The requests I have made concern only HMT’s interpretation of the law of the land, and how they are operating the UK finance system within the law. Demonstrating that HMT is complying with the law improves confidence in the UK economy rather than detracts from it. Hence the lengthy history of texts discussing these matters, and to which I am looking to add.

I would also emphasise that, in the decade which has featured the two biggest recessions in living memory and an unprecedented focus within political discourse on government finances, often initiated by the Government itself, understanding the nature of the government’s financial activities, and the constraints or privileges with which the government does or can operate, is an essential component of democratic expression, accountability and transparency. This would be true of any time - and apparently was considered so, given the list of literature above, many of which cite official sources - but is particularly true today.

I request that you reconsider the response to my questions.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/w...

Yours faithfully,

Andrew Berkeley

FOI Requests, Her Majesty's Treasury

Dear Andrew Berkeley

Thank you for your email regarding your request for an internal review.

I can confirm that your review request was received on 1 April 2021 and is
receiving attention under our reference IR2021/11822.

There is no statutory deadline for responding to internal review requests.

However, in line with the Information Commissioner’s guidelines and the
2018 FOI Code of Practice, we aim to complete  internal reviews within 20
working days.

Yours sincerely,

Information Rights Unit | Correspondence and Information Rights | HM
Treasury, 1 Horse Guards Road, London, SW1A 2HQ  
[1]www.gov.uk/hm-treasury

This email and any files transmitted with it are intended solely for the
use of the individual(s) to whom they are addressed. If you are not the
intended recipient and have received this email in error, please notify
the sender and delete the email. This footnote also confirms that our
email communications may be monitored to ensure the secure and effective
operation of our systems and for other lawful purposes, and that this
email has been swept for malware and viruses.

References

Visible links
1. http://www.gov.uk/hm-treasury

FOI Requests, Her Majesty's Treasury

1 Atodiad

Dear Andrew Berkeley

Please find attached a response to your recent IR request.

Kind regards

Information Rights Unit

| HM Treasury | Ground Orange | 1 Horse Guards Road, SW1A 2HQ |
[1]www.gov.uk/hm-treasury

References

Visible links
1. http://www.gov.uk/hm-treasury

Nid ydym yn gwybod a yw'r ymateb mwyaf diweddar i'r cais hwn yn cynnwys gwybodaeth neuai peidio - os chi ywAndrew Berkeley mewngofnodwch a gadael i bawb wybod.