I had intended to speak about Capita, but the mere mention of the name reminds me of the meeting that Jane Hutt and I had this morning with victims of, mainly, vaginal mesh implants, who, unprompted, were absolutely apoplectic about Capita's role on behalf of Department for Work and Pensions in assessing these people as to whether or not they were still eligible for attendance allowances as well as other disability benefits, and Capita's refusal to allow people to have the dignity of an assessment at their home. These are people who are suffering from incontinence, and many of them walk with crutches because they have additional problems with their back and their mobility. And because they then struggled into a meeting in Cardiff city centre with Capita, they were then deemed not eligible for mobility allowances. Incredible. This is absolutely outwith the public service that we have here in Wales.

Anyway, my main remarks I wanted to make are about who audits the auditors, because it is rarely asked, and in the context of Carillion, it needs to be asked. Because the good audits are the bedrock of fair and transparent financial markets and good business decisions, and this system of auditing public spending dates back more than a century. Why should we have to read between the lines to work out what auditors are really thinking? They have developed this code for enabling the people on the inside, in the know, to realise that there may be something dodgy going on, but not for the ordinary potential investor, and this is completely unacceptable. We have to make auditors more accountable for their actions because of the spectacular failure of Carillion, where, frankly, their published works turned out to be works of fiction. 

Extraordinarily, KPMG tried to argue that its independence was not impaired by 19 years of auditing Carillion. I think that that is beyond credibility and needs to change. One of the immediate sources of conflicts of interest is that auditors are paid by the company that they are auditing—the people they are meant to be policing. That in itself is a potential conflict of interest. The work and pensions and business committees in the House of Commons's joint inquiry into Carillion recommends that the Government refers the audit market to the Competition and Markets Authority, because the big four are effectively operating a cosy cartel where their audit work takes second stage to their much more lucrative business of advising companies, and as we have seen with Carillion, they are in many ways directly in conflict—these two activities. 

So, we either have to break up the big four into more audit firms, or we have to detach the audit arms from those lucrative consultancy services that have come to dominate these accountancy firms, into which all the big four have branched out in recent years. Non-audit work now makes up £4 in every £5-worth of fee income garnered by the big four. So, you can see that there's already a total imbalance. This will, I hope, find favour in view of the lack of competition in the market, particularly for the big companies. Of the top 350 companies in Britain, 97 per cent are audited by the big four. The situation is getting worse, because the fifth-largest company, Grant Thornton, has said they're no longer going to tender for audit for the FTSE 100 companies because the cost of bidding for work they are unlikely to get is just too great.

Now, the Competition Commission, which preceded the CMA, did investigate the lack of competition in audit between 2011 and 2013, but ruled out breaking up the big four. One of the reasons they gave was that, because auditors carry unlimited liability for their recommendations, they therefore need to be big. But the fees available are unlikely to be worth enough to make small audit firms want to take on the risk of a large audit account.

We have seen in the past that being large does not make organisations immune to collapse. Remember that there did in fact used to be the big five, and Arthur Andersen collapsed because of their failure to properly audit Enron. I think that there are huge dangers for the Welsh Government in doing nothing, because let us recall that Abellio was one of the approved shortlisted companies that could have been awarded the contract to run the Wales and the borders franchise, had the Carillion collapse not occurred earlier, taking them out of the market. I think in general terms—