Budget Responsibility and National Audit Bill [HL]

Baroness Browning Excerpts

Monday 29th November 2010 Grand Committee

[Lord Sassoon]

First of all, of course I take everything that is being raised this afternoon extremely seriously, but it would not be helpful to the Committee if I said, in some sort of Panglossian way and in approving terms, that I was equally sympathetic to all the points that were being raised. Points will be raised in this Committee to which I shall be more or less sympathetic and I shall try to give some indication of that, because I do not think that it is helpful to the Committee’s consideration, or to noble Lords at Report, if I just give an equally sympathetic ear to all points regardless of whether I believe that they have merit.

I am sorry that I failed to get across the key simplicities of where we are on Clause 1 and the proposed amendments, but the Bill’s purpose, which has been widely recognised, is to bring a new degree of independence to the construction of the forecast and to the establishment of whether the Government are likely to meet their fiscal policy mandate. Those are huge advances on where we have come from and the Bill is very much focused on that. Clause 1 and the linkage to the charter are all about that.

This Government have many other transparency objectives, but it is not the objective of the OBR and this Bill to stray into other areas related to economic policy-making. The purpose of the budget responsibility parts of the Bill is very much focused on the central core mandate of the OBR. Of course, it would be possible to turn the charter for budget responsibility into a much wider analysis of government economic policy, but that is not the charter’s purpose, nor is it the purpose of the Bill. The discussions about intergenerational transfer of fairness and all those things are important issues, but the key element for the consideration of Clause 1 is that the charter sets the appropriate and focused background in which the OBR can do its work.

We have set out a new and unprecedented set of objectives for fiscal policy, but it is not they but the mandate that flows from them that is the critical element. I am listening to questions about the drafting of the objectives, and I shall consider those carefully in the charter, but that is a very different matter from requiring in the Bill a direct linkage through to economic policy objectives.

[Baroness Browning]

Does my noble friend recall the concern expressed by the Treasury Committee when Sir Alan Budd appeared before it and the regrets expressed by Sir Alan when the interim OBR strayed into the area of employment forecasting? The feeling was that that was very unhelpful to the credibility and reputation of the OBR.

[Lord Sassoon]

I am grateful to my noble friend for reminding us that the OBR should be set a focused mandate. It is then up to the OBR what it considers is appropriate, in its analysis, to explain as background to the mandate that it has been given. It is clearly neither necessary nor helpful to give this Bill different purposes from those that it has—to set a remit for the Office for Budget Responsibility, which is what the charter intends to do, and only that.