The Chief Secretary to the Treasury (Darren Jones)

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I beg to move, That the Bill be now read a Second time.

I congratulate you and welcome you to your place in the Chair, Madam Deputy Speaker. It is a privilege to open this debate in my first appearance at the Dispatch Box as a Minister in this new Labour Government.

At the general election, the British people voted for change, and this new Labour Government began work immediately to deliver on that mandate. Sustained growth is the only route to the improved prosperity that this country needs and to improve the living standards of the British people. After 14 years of Conservative failure, this work is urgent—it is now our national mission. To deliver on that mission, as my right hon. Friend the Chancellor set out days after taking office, we must fix the foundations of the economy and restore economic stability. She emphasised that commitment to delivering economic stability by meeting with the Office for Budget Responsibility soon after becoming Chancellor.

Under the legal framework we inherited from the Conservative party, there is no requirement on the Treasury to subject fiscally significant announcements to independent OBR scrutiny. We all experienced what happens when huge unfunded fiscal commitments are made without proper scrutiny and key economic institutions such as the OBR are sidelined. The country cannot afford a repeat of the calamitous mini-Budget of September 2022, when Liz Truss and Kwasi Kwarteng’s reckless plans unleashed economic turmoil that has loaded hundreds of pounds on to people’s mortgages and rents. Conservative Ministers put ideology before sound public money and party before country.

This Labour Government are turning the page: we will always put the country first and party second. Our commitment to fiscal discipline and sound money will never waver. That is why we are firmly committed to the independence of the OBR, and to the important principle that in normal times, the announcement of a fiscally significant measure should always be accompanied by an independent assessment of its economic and fiscal implications, in order to support transparency and accountability. That is why we made a commitment in our manifesto to strengthen the role of the OBR, and it is why we have acted quickly to deliver on that commitment today.

This action will reinforce credibility and trust by preventing large-scale unfunded commitments that are not subject to an independent fiscal assessment. As Richard Hughes, the chair of the OBR, reiterated in his recent letter to the Chancellor,

“it is a good principle of fiscal policymaking that major fiscal decisions should be based upon, and presented alongside, an up-to-date view of the economic and fiscal outlook”.

In line with this, the Chancellor yesterday commissioned a full forecast to accompany our Budget on 30 October, following the important principle that significant fiscal policy decisions should be made at a fiscal event and accompanied by an independent OBR assessment. That fiscal lock is an essential part of our mission to deliver economic stability. It is one of our first steps towards fixing the foundations of the economy, and it is our guarantee to the British people that this Labour Government are a responsible Government who will never play fast and loose with public and family finances, as the Conservative party has done before.

The Bill sets the legal framework for the operation of the fiscal lock. It builds on the Budget Responsibility and National Audit Act 2011, which established the OBR. In line with that, the technical detail underpinning the fiscal lock will be set out via an upcoming update to the charter for budget responsibility. The charter sets out the Government’s fiscal framework, including guidance on how the OBR performs its duties within that framework. To support scrutiny of the Bill during its passage through Parliament, the Treasury has published a draft of the relevant charter text, which will make clear exactly how the Government plan to implement the fiscal lock. A full update to the charter will be published in due course, and Members will vote on it in the usual way.

The Bill itself does five things to ensure that proper scrutiny of fiscal plans will take place. First, it requires the Treasury, before the Government make any fiscally significant announcement in Parliament, to request that the OBR presents an assessment taking the announcement into account. This builds on the usual process whereby the Chancellor commissions the OBR for an economic and fiscal forecast to accompany a fiscal event. It guarantees in law that, from now on, every fiscally significant change to tax and spending will be subject to scrutiny by the independent OBR.

Secondly, the Bill gives the OBR new powers to independently decide to produce an assessment if they judge that the fiscal lock has been triggered. If a fiscally significant announcement is made without the Treasury having previously requested a forecast from the OBR, the OBR is required to inform the Treasury Committee of its opinion and then prepare an assessment as soon as is practicable. That means that, come what may, the OBR, through Parliament, will be able to hold the Government to account.

Thirdly, the Bill defines a measure, or combination of measures, as “fiscally significant” if they exceed a specified percentage of GDP, with the charter then setting the precise threshold itself. Setting the threshold in this way provides clarity for both the OBR and external stakeholders about what constitutes a “fiscally significant announcement”—that is, when the fiscal lock has been triggered—and it ensures that the Government can set it at the right level going forward, recognising economic conditions. The threshold level will be set at announcements of at least 1% of nominal GDP in the latest OBR forecast. As an example, this year the 1% threshold would be £28 billion. This will ensure that we properly capture any announcements that resemble the growth plan of former Members Liz Truss and Kwasi Kwarteng in 2022, with the broader risks to macroeconomic stability that this entailed.

Fourthly, the Bill ensures that the fiscal lock does not apply to Governments responding to emergencies, such as the covid-19 pandemic. The Bill does so by not applying in respect of measures that are intended to have a temporary effect and which are in response to an emergency. The charter will define “temporary” as any measure that is intended to end within two years. This recognises that it is sometimes reasonable—for example during a pandemic—for the Government to act quickly and decisively without an OBR assessment, if that is needed in response to a shock. Of course, in emergencies it may be appropriate for the Chancellor to commission a forecast from the OBR to follow measures that needed to be announced or implemented rapidly, and that would happen in the usual way. Alongside any such announcement, the Treasury will be required to make it clear why it considers the situation to be an emergency. As set out in the updated charter, the OBR will have the discretion to trigger the fiscal lock and prepare a report if it reasonably disagrees.

Fifthly and finally, the Bill requires the Government to publish any updates to the detail of the fiscal lock—such as the threshold level at which it is triggered—in draft form at least 28 days before the updated charter is laid before Parliament. This is an essential safeguard in the Bill, preventing any future Government from choosing to ignore the fiscal lock by updating the charter without the consent of Parliament.

Darren Jones

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I thank the hon. Gentleman for his contribution. As I am sure he knows, the Chief Secretary to the Treasury is traditionally the lead Minister in Government for relationships with the Finance Ministers in the devolved Governments. I have already met a number of times with counterparts in the Northern Ireland Executive, as well as those in Scotland and Wales. I look forward to meeting them in person in Northern Ireland, I hope in September, for further such discussions.

To conclude, people across the country are still suffering the consequences of the Conservative party’s economic experiment in 2022. Conservative Ministers took the most reckless decisions without any thought for their real-life impact on the British economy and on family finances. Astonishingly, they have still made no apology.

With this Labour Government, our commitment to fiscal discipline and sound money is the bedrock of our plans. The Budget Responsibility Bill guarantees in law that, from now on, every fiscally significant change to tax and spending will be subject to scrutiny by the independent OBR. The Bill will reinforce credibility and trust by preventing large-scale unfunded commitments that are not subject to the scrutiny of an OBR fiscal assessment. This delivers on a key manifesto commitment to provide economic stability and sound public finances by strengthening the role of the independent OBR. This is a crucial first step to fix the foundations in our economy, so that we can achieve sustained economic growth and make every part of the country better off.

For those reasons, I commend the Bill to the House.

The Exchequer Secretary to the Treasury (James Murray)

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I welcome your election to the Chair, Madam Deputy Speaker. It is a privilege to close this debate on the Budget Responsibility Bill on behalf of the Government. I thank all hon. Members for their contributions; in a moment I will address many of the points that they have raised.

Let me start by reminding the House why the Bill is so important and what it is designed to achieve. At the general election earlier this month, the British people voted for change. They voted to turn the page on 14 years of economic failure. People across Britain voted to remove the Conservatives from power. They voted to remove the party that crashed the economy, and whose Ministers we now know were reckless with the public finances right till the very end. People voted to give Labour the chance to serve. With that honour afforded to us, we have got to work straightaway in fixing the mess the previous Government left and getting our economy growing.

That economic growth is at the heart of our national mission as a Government. That growth underpins our plans in government to make people in every part of the UK better off and to get public services back on their feet in a sustainable way. We know that a crucial foundation for sustained growth is economic stability and fiscal responsibility. We have brought that stability and fiscal responsibility back into the heart of government. Our fiscal rules are non-negotiable. As the Chancellor set out yesterday, meeting them is a principle on which this new, Labour Government were elected, and that will guide her at October’s Budget.

But we want to go further in restoring the trust that was so badly damaged by the Conservatives during their time in office, by embedding fiscal responsibility not just into our country’s government but also into its laws. That is why one of the first Bills to be presented to the House of Commons by our new Government was the Budget Responsibility Bill whose Second Reading we are debating today. The Bill will hardwire fiscal responsibility into significant financial decisions of any future Government, and it will prevent any party ever again being able to play fast and loose with the public finances.

We saw under the previous Government what happens when politicians fail to show respect for taxpayers’ money. People across Britain are still feeling the impact of Liz Truss and Kwasi Kwarteng’s recklessness nearly two years on from the economic disaster they created. The Conservatives’ recklessness in 2022 showed just how much damage unfunded spending commitments can cause. Ministers at the time unleashed economic turbulence that pushed up people’s mortgages and rents and made people across Britain worse off, though it hit the least well-off the hardest. We must never let that happen again.

Budget responsibility must never be optional. That is why Labour will hardwire this responsibility into Government through our fiscal lock, which will mean that all significant fiscal announcements in future will be guaranteed independent scrutiny from the Office for Budget Responsibility. This Bill empowers the OBR to independently produce an assessment of a Government’s fiscal plans if it judges that the fiscal lock has been triggered. That will make sure that there is always proper scrutiny of a Government’s fiscal plans, and guard against large-scale unfunded commitments and disasters such as the Conservatives’ so-called mini-Budget ever happening again. This Bill is a crucial step in fixing the foundations of what we have inherited.

I will take a pause from focusing on the substance of the Bill to thank so many hon. Members for their truly excellent maiden speeches. We had a real tour around Britain, and I feel I have got to know places in all corners of our country through their passionate speeches about the places and people they are all so proud to represent.

We began with my hon. Friend the Member for Glasgow North (Martin Rhodes), who spoke about Kelvingrove park, which I went to when I visited Glasgow. He spoke about the serious work of Government, and the importance of delivery and rebuilding trust in politics.

My hon. Friend the Member for East Renfrewshire (Blair McDougall) said that the hard decisions we make today are what create a better tomorrow. There is no better summary of the position we find ourselves in today. He spoke passionately about the history of his constituency and the importance of a better future for the next generation.

The hon. Member for Carshalton and Wallington (Bobby Dean) spoke movingly about his upbringing and how it has influenced his politics. He also spoke about his anger at the previous Government’s recklessness. I have to say that while I enjoy going to the pub when there are big games on, I do not know that much about football, so I actually understood the fiscal bit of his speech more than the football analogy.

The Minister of State, Home Department (Dame Angela Eagle)

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Shame!

James Murray

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I am just being honest—honesty in politics!

My hon. Friend the Member for Southend West and Leigh (David Burton-Sampson) made a very important point that we should all heed about civility in politics. He spoke about the diverse community spirit in his area, but I am not going to even begin to compete with him on how impressive the coastline is in my landlocked suburban constituency.

The hon. Member for Chichester (Jess Brown-Fuller) spoke about how special and sunny her constituency is. She began a new competition; now it is not only who has the most beautiful constituency, but the sunniest. I was very touched by her recognition of the importance of family for both inspiration and practical support in politics.

My hon. Friend the Member for Peterborough (Andrew Pakes) spoke about his Co-operative and trade union values, which I think many of us Labour Members share. I did not know until he spoke about the connection between Peterborough and mustard, so that is something I have learned today. I thought that his focus on the promise of new towns really sums up our sense of optimism for the future. There is the idea of being proud of one’s heritage, and honest about the challenges that we face, but he is also ready to achieve more in the future with a Government who support him. I wish him great stability in his seat.

The hon. Member for Maidenhead (Mr Reynolds) gave a particularly rich history of his constituency, which went from bridges to “Carry On” movies, and he also mentioned the Spice Girls. I think a Spice Girls CD was the first I ever bought, but he may not know what a CD is. That sums up the different perspectives we come from.

My hon. Friend the Member for West Ham and Beckton (James Asser) spoke about the Royal Docks, where I spent much time in a previous role working at City Hall; I saw the great potential that that area of the capital city has. He eloquently set out the combination of heritage and diversity, past and present, that makes his constituency such a lively and wonderful place to represent. I make him an offer: when he is jumping on the Elizabeth line to visit the hon. Member for Maidenhead, he can stop off at West Ealing to say hello to me.

The hon. Member for Ynys Môn (Llinos Medi) spoke honestly about the importance of keeping people in this place on their toes. That is right; the electorate do keep us on our toes, and one of the great benefits of our system is the way in which we are brought down to earth every time we go back to our constituencies on Thursdays or Fridays. However great and important the debates in this place are, when we knock on that door or sit down in our surgery, we are brought right back down to earth. It is a great feature of our political system, and she was right to draw attention to it.

My hon. Friend the Member for Kettering (Rosie Wrighting) spoke about how proud she was of the history of the place that she now represents and where she grew up. I was very moved to hear her speak about her mum’s role as a local youth worker, and how that inspired her to do what she is doing in life. I wish her well as one of the youngest MPs in this place.

My hon. Friend the Member for Wirral West (Matthew Patrick) spoke about the natural beauty of his constituency—he was not the first Member to do so today—and the passion of the people there. His comments about politics being as much about listening as speaking were particularly thoughtful. We should all bear that in mind in this place. He made an important point about learning from those with whom we disagree, or maybe only appear to disagree, and about breaking down barriers through listening and having conversations.

My hon. Friend the Member for York Outer (Mr Charters) spoke about businesses and voluntary projects in his constituency. He underscored how important it is that taxpayers’ money is treated with respect. I know that the residents of York Outer will be very well served by the excellent new MP we heard from today.

My hon. Friend the Member for Earley and Woodley (Yuan Yang), whom I enjoyed campaigning with during the general election, managed to inject some humour into economics, which is quite an achievement for a maiden speech. I am not even going to begin to try to replicate that in my comments just now, but she spoke passionately about the importance to those in her constituency of having access to nature and affordable housing. I know from what she said, particularly about her personal experience, that she will be a true champion for breaking down barriers to opportunity.

Finally, we heard from my hon. Friend the Member for Falkirk (Euan Stainbank), and it was worth the wait to hear his wonderful speech. He gave a fantastic whistle-stop tour of his constituency, and made many excellent recommendations of where to eat and drink next time we are in the area. What really came across is how connected he is to the community he represents, through his neighbours, his friends and his family. He used a phrase that sums up well what I and other Government Members want to do: unite and serve.

Those were all the maiden speeches we had today. It was a truly excellent tour of not just the country, but the talent we have in this place following the general election. I wish all hon. Members very well for however many years they spend in this place.

We heard from other Members about the substance of the Bill, including the shadow Ministers. They both seemed a bit confused about whether they support the OBR and the Bill. I am glad that they confirmed that they support the Bill and will not vote against it, but at one point the hon. Member for Grantham and Bourne (Gareth Davies) seemed to defend Liz Truss over her handling of the economy. He must be pretty much the last person in the country willing to do so; it was certainly brave of him. We Government Members are clear on why the OBR is so important and what its role should be. The Bill sets out to strengthen that.

The hon. Gentleman asked what the purpose of the fiscal lock might be. The fiscal lock will prevent the sidelining of the OBR by giving it the power to start an assessment if the Government announce fiscally significant policies without one. I remind him that the current shadow Chancellor said, at the time of the disastrous mini-Budget, that some of the difficulties were caused by the lack of a forecast, so this is something that the Opposition agree with.

The shadow Minister also asked about the definition of an emergency. We are very clear that in emergencies—for instance, during the pandemic—it may be necessary for the Government to take rapid action. In those cases, it would not be appropriate to hold back the response to the emergency until a forecast could be produced. Finally, he asked whether the OBR reports triggered by the fiscal lock will be published. I can answer him simply: they will. That is set out in section 8 of the original Budget Responsibility and National Audit Act 2011.

I welcome the support from the Lib Dem spokesperson, the hon. Member for Richmond Park (Sarah Olney), for the Bill. She asked about the definition of “significant”, a point also raised by my hon. Friend the Member for Walthamstow (Ms Creasy). The threshold set out in the draft charter for budget responsibility, which we have on the gov.uk website, is 1% of GDP in any single financial year. The purpose of the legislation is to prevent large irresponsible fiscal announcements that could undermine economic stability, and that requires a threshold targeted at fiscally significant announcements. That is why we have chosen that figure in the draft legislation and the draft text published on gov.uk.

Let me mention two other Members who spoke in the debate. I welcome the support of the hon. Member for Angus and Perthshire Glens (Dave Doogan) for the Bill. I think that his only criticism was one word in the terminology, and we can probably live with that. He said that he was nauseous from hearing us talk about being a Government of service, but he may have to get used to feeling nauseous, because we will proudly be a Government of service every day that we have the honour to serve.

Finally, I am glad that this is not an exceptional debate in which the hon. Member for Strangford (Jim Shannon) does not make an intervention. I welcome his support for the Bill, and for the Government’s wider actions in resolving the junior doctors’ industrial dispute. I reassure him that, like my right hon. Friend the Chief Secretary to the Treasury, I recognise the importance of working with political representatives from all nations in the UK.

As my right hon. Friend said at the beginning of this debate, a crucial first step to achieving sustained economic growth is delivering economic stability. This Bill will help provide that stability and ensure that fiscal responsibility is not only embedded in our approach to government, but locked into how government works from this point on. It will make sure that there is always proper scrutiny of the Government’s fiscal plans, reinforcing credibility and trust, and making sure that no Government can ever again play fast and loose with the public finances. The Bill is a key step in fixing the foundations of our country as we set out to get the economy growing and to make families across Britain more secure and better off.

We now know that the Conservatives called the election to run away from the problems that they had covered up, rather than taking the tough decisions to fix them. While they may have run away from the problems that they created, they cannot run away from their record in office. People in Britain will not forget the last Government’s recklessness in 2022, which showed just how much damage unfunded spending commitments can cause. Budget responsibility will never be optional under Labour, as it was under the Conservatives. We have brought fiscal responsibility back into the heart of government, and we will hardwire it into law through our fiscal lock. That is what this Bill will achieve. This Bill will draw a line under the economic recklessness of recent years and make it clear that it must never be allowed to happen again. Budget responsibility underpins our national mission to make people across Britain more secure and better off. For that reason and others, I commend this Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Budget Responsibility Bill: Programme

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Budget Responsibility Bill:

Committal

(1) The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee, on Consideration and on Third Reading

(2) Proceedings in Committee shall (so far as not previously concluded) be brought to a conclusion four hours after their commencement.

(3) Any proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion five hours after the commencement of proceedings in Committee of the whole House.

(4) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to proceedings on Third Reading.—(Jeff Smith.)

Question agreed to.

Budget Responsibility Bill: Money

King’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Budget Responsibility Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenditure incurred by the Treasury in consequence of the Act.—(Jeff Smith.)

Question agreed to.

Business of the House (Today)

Ordered,

That at today’s sitting, notwithstanding the provisions of Standing Order No. 122B, the Speaker shall put the Questions necessary to dispose of proceedings on the Motion in the name of the Prime Minister, Rishi Sunak and Ed Davey relating to Select Committees not later than one hour after the commencement of proceedings on the Motion for this Order; such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved; proceedings on that Motion may continue, though opposed, after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Lucy Powell.)

The Chief Secretary to the Treasury (Darren Jones)

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It is a pleasure to serve under your chairship, Ms Nokes. May I start by congratulating hon. Friends and others on delivering their maiden speeches? It has been a pleasure to be in the Chamber to hear them this afternoon. They will clearly be great champions for their constituencies.

I will take a few moments to remind the House of why we are taking forward the important clauses in the Bill, and to set out the Government’s views on the proposed amendments. At the general election, the Government received a mandate for economic growth. That is the only route to improving prosperity, and it is now our national mission. A crucial first step to achieving it is to deliver economic stability. We have seen what happens without stability: at the 2022 Conservative mini-Budget, huge unfunded fiscal commitments were made without proper scrutiny, and key economic institutions such as the Office for Budget Responsibility were sidelined. That is why we have made a commitment in our manifesto to a fiscal lock that will strengthen the role of the OBR, and why we have taken quick action to deliver on that commitment. That will reinforce credibility and trust by preventing large-scale unfunded commitments that are not subject to an independent fiscal assessment, and proves that we are a responsible Government who will not play fast and loose with the public finances as the previous Government did.

The Bill sets out the legal framework for the operation of the fiscal lock, and builds on the Budget Responsibility and National Audit Act 2011. In line with that established legal framework, some of the technical detail underpinning the fiscal lock will be set out via an upcoming update to the charter for budget responsibility, a draft of which the Treasury has published to support scrutiny of the Bill today.

I will now talk through the Bill’s two clauses. The first is the main substantive clause, setting out the operation of the fiscal lock. It introduces a new section 4A into part 1 of the Budget Responsibility and National Audit Act 2011, which relates to budget responsibility and was used to legally establish the OBR.

Clause 1 makes five key changes. First, new subsection (1) of section 4A guarantees in law that from now on, every fiscally significant change to tax and spending will be subject to scrutiny by the independent OBR. It will require that before a Government Minister makes any fiscally significant announcement to Parliament, the Treasury always requests that the OBR prepare an economic and fiscal forecast. This builds on existing legal frameworks requiring the OBR to produce at least two forecasts per year. Importantly, the OBR’s assessment should include the extent to which the Government are meeting their fiscal mandate. That requirement applies when two or more announcements are made and the combination of measures is fiscally significant, irrespective of whether the measures are announced at the same time. It will also apply separately to costs and savings, so that those cannot be offset against each other.

New subsection (2) strengthens the role of the OBR by requiring it to produce an independent assessment if it judges that the fiscal lock has been triggered. If a fiscally significant announcement is made without the Treasury having previously requested a forecast, the OBR is required to inform the Treasury Committee of this House of its opinion, and then prepare an assessment as soon as is practicable.

New subsection (3) defines a measure or combination of measures as “fiscally significant” if they exceed a specified percentage of GDP. In line with the existing legal framework, the precise threshold will be set via an update to the charter for budget responsibility, a draft of which will be published on gov.uk. The threshold level itself will be set at announcements of at least 1% of nominal GDP in the latest forecast—as an example, this year, that 1% threshold would be £28 billion.

New subsection (4) ensures proper scrutiny of the Government’s fiscal plans without preventing them from responding to emergencies such as the covid-19 pandemic. It sets out that the fiscal lock does not apply in respect of measures that are intended to have a temporary effect and are in response to an emergency. The charter will define “temporary” as any measure that is intended to end within two years. To safeguard against this subsection being used to avoid proper scrutiny, as set out in the updated charter, the OBR will have the discretion to trigger the fiscal lock and prepare a report if it reasonably disagrees.

Finally, new subsection (6) prevents any future Government from choosing to ignore the fiscal lock by simply updating the charter for budget responsibility alongside a fiscally significant announcement. It achieves this by requiring the Government to publish any updates to the detail of the fiscal lock, such as the threshold level at which it is triggered, at least 28 days before the updated charter is laid before Parliament.

Clause 2 sets out when the Bill will come into force and to whom it applies. Subsection (1) confirms that it deals with reserved or excepted matters, and that its provisions extend and therefore apply to England, Wales, Scotland and Northern Ireland. Subsections (2) and (3) allow for the commencement of the legislation to occur at the appropriate time, as is usual practice. We expect this will take place ahead of the upcoming Budget on 30 October.

I will now turn to the amendments that right hon. and hon. Members have tabled.

Darren Jones

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Briefly, yes.

Darren Jones

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My hon. Friend has hit the nail on the head. Indeed, I might go so far as to say that that was one of the reasons we achieved such a large mandate at the last general election, with so many hon. Friends on the Government Benches. We will never play fast and loose with the economy, as Members on the Conservative Benches did, and this Bill will prevent that from happening again in the future.

I start with amendments 9 and 10, tabled by the shadow Chancellor. They would require the OBR to publish a report whenever His Majesty’s Treasury announces new fiscal rules. The purpose of the Bill is to ensure that no Government can make large-scale announcements of tax and spending without being subject to independent assessment. The Government’s robust fiscal rules will support economic stability, but do not change tax and spending. It is those decisions that matter, as we saw when the previous Conservative Government announced £45 billion of unfunded commitments in the 2022 mini-Budget.

Darren Jones

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Briefly.

Darren Jones

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The hon. Gentleman is enjoying himself, but he knows the answer: wait for the Budget.

The amendments from the official Opposition are therefore not necessary. To answer the question from the shadow Financial Secretary, the hon. Member for Droitwich and Evesham (Nigel Huddleston), as I have been invited to do so, the Chancellor has already confirmed that the Government will set out the precise details of our fiscal rules at the Budget on 30 October, alongside an updated OBR forecast.

amendments 6 and 7, tabled by my hon. Friend the Member for Walthamstow (Ms Creasy), focus on the definition of “fiscally significant” measures to which the fiscal lock will apply. They would extend the definition to include measures that have a cumulative effect on public sector net debt or contingent liabilities. I welcome my hon. Friend highlighting this issue, on which I know she has worked for many years. The draft charter text states that measures will trigger the lock when the combined costing is at least 1% of GDP in any year, and specifically:

“The costing of a measure is the direct impact of a policy decision on the public finances”.

It is difficult to set and interpret a threshold consistently for contingent liabilities as they can often be large in maximum exposure, but low in expected or reasonable worst-case losses. Effective management of contingent liabilities is important, and transparency is key to good fiscal management. The Government plan to announce new significant contingent liabilities at fiscal events to make sure there is transparency with Parliament. We will of course continue to notify Parliament of new contingent liabilities, as set out in “Managing Public Money”.

The amendments would also place a condition on policies with a cumulative impact on public sector net debt, and my hon. Friend noted public-private partnerships as an example. She was referring to PFI and PF2 models, which the previous Government had no longer proceeded with, and there has been no change to this policy. As the Chancellor said in her Mais lecture earlier this year, we will also report on wider measures of public sector assets and liabilities at fiscal events to ensure transparency across the whole balance sheet, which includes non-debt liabilities. Reporting transparently on the Government’s stock of contingent liabilities is key to ensuring we do not take excessive risk. I can therefore confirm today that the Government will publish a report on our contingent liabilities. I expect the contingent liability central capability to do this in early 2025. Having said all that, I recognise the issues my hon. Friend raises, and I will arrange to meet her to discuss them further.

Moving on to the Liberal Democrat amendments, amendment 2 was tabled by the hon. Member for Richmond Park (Sarah Olney). As she said, it would enable the OBR to notify the independent adviser on Ministers’ interests if the fiscal lock was triggered. I remind hon. Members that the purpose of this Bill is to ensure that never again do we find ourselves in a situation, like at the 2022 Liz Truss mini-Budget, in which fiscally significant measures are announced without accompanying OBR analysis. If a future Government were to act in this way, the Bill provides a clear remedy. The OBR is empowered to independently notify the Treasury Committee and to produce its own report. This would be available for full scrutiny by stakeholders and Parliament, which would be able to hold Ministers to account in the normal way. We therefore do not consider the amendment necessary.

Amendment 1, also tabled by the Liberal Democrats, would broaden the definition of fiscally significant measures to cover anything that is likely to have an impact on the cost of Government borrowing, interest rates or economic growth. The Bill is focused on preventing irresponsible large-scale fiscal announcements that could undermine macroeconomic stability, such as at the mini-Budget. To support that, we need clear and robust legal frameworks that ensure the provisions are triggered only when appropriate. This requires precise definitions that everyone, including the OBR in particular, can understand clearly and work with practically. It would therefore not be helpful, in the Government’s view, to have a broader, vaguer definition that might repeatedly trigger the fiscal lock under many different circumstances.

Amendments 3 and 4 would require the Treasury to consult the OBR and the Treasury Committee before the charter can be updated for the purposes of the fiscal lock, and to publish a report on the outcome of any such consultations. It is of course important that the views of the OBR and of Parliament are taken into account when making changes to the charter. However, I hope the hon. Member will accept that it will not be necessary to set out this specific process in primary legislation, because the Bill already includes an important safeguard on the fiscal lock, which is the requirement that any changes to the charter for budget responsibility are published in draft at least 28 days before they are laid in the Commons. That will ensure that the OBR, the Treasury Committee, this Parliament and all stakeholders will have a clear opportunity to make representations to the Treasury and to publish their views, as they see fit.

Amendment 5, tabled by the hon. Member for North Herefordshire (Ellie Chowns), would require the OBR to take net zero targets into account when preparing a report on fiscally significant announcements. Strong legal frameworks are already in place in the Climate Change Act 2008 to support the transition to net zero in 2050. The Act legislates for interim five-year carbon budgets, and requires the Government to report on those periodically. Parliament and its Select Committees already scrutinise that in great detail. The Green Book, the Treasury’s guidance on how to appraise policies, projects and programmes, requires Departments to assess the climate and environmental impacts of policy proposals, with major bids and proposals at fiscal events being assessed accordingly in that way. We therefore do not consider the amendment to be necessary.

Darren Jones

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And it is equipped to do the job it is supposed to do, alongside the other regulatory body that holds the Government to account, the Committee on Climate Change.

In conclusion, I hope I have been able to provide some assurances and that hon. Members will be content to retract their amendments. If not, I urge the House to reject them. I thank other Members for their contributions to the debate. I gently invite the hon. Member for Arundel and South Downs (Andrew Griffith) to reflect on his own party’s record in crashing the economy through unfunded tax cuts, losing control of public spending and ruining family finances, before offering advice to this Government on fiscal responsibility. I say to the SNP spokesperson, who is not in his place, that I was surprised to see so many discredited Conservative party lines to take in his speech. Who knew that the SNP and the Tory party were one and the same thing?

With this Labour Government our commitment to fiscal discipline and sound money is the bedrock of all our plans. The Bill will guarantee in law that from now on every fiscally significant change to tax and spending will be subject to scrutiny by the independent OBR. That delivers on a key manifesto commitment to provide economic stability and sound public finances by strengthening the role of the independent OBR. That is a crucial first step to achieve sustained economic growth, and I commend the Bill to the House.

Darren Jones

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I thank the hon. Gentleman for giving way, and for inviting me to suggest whether I should try to find a job in another Department. I just point out that, having arrived at the Treasury, I have seen the impact of fiscally significant levels of debt after 14 years of the Conservative Government. Has he got anything to say to the House on that matter?

Darren Jones

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rose—

Darren Jones

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I beg to move, That the Bill be now read the Third time.

I will not take up too much more time, but I will provide a final reminder of how important this legislation is. At the general election, the Government received a mandate for economic growth. Sustained growth is the only route to improve prosperity and to improve the living standards of the British people. It is now our national mission.

Economic stability is key to achieving this. We have seen what happens without it, when huge, unfunded fiscal commitments are made without proper scrutiny and when key economic institutions such as the OBR are sidelined. We cannot let ourselves get into that position again. Unfunded, unassessed spending commitments not only threaten the public finances, they can threaten people’s incomes and mortgages, as we saw under the previous Government.

I therefore encourage Conservative Members—who have told us today that, after 14 years of Conservative government, the economy has never been so good—to reflect, if only for a moment, on why they lost all credibility for economic competence and suffered the worst election result in their history.

Once again, I congratulate all my hon. Friends and other hon. Members on their excellent maiden speeches today. I thank hon. and right hon. Members on both sides of the House for their contributions, and I thank the Clerks and officials who have supported the Bill’s rapid passage.

The Budget Responsibly Bill forms a small but vital part of our plan to restore economic stability and deliver economic growth. For these reasons, I commend it to the House.

Darren Jones

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I always welcome the opportunity to return to the Dispatch Box, and I thank the shadow Minister for inviting me to do so. Opposition provides an opportunity for reflection. While he is offering his thoughts on our two months in office—two months of great relief for the British people—does he have anything to say about his 14 years in office before the election?