Budget Responsibility and National Audit Bill [HL]

Lord Brooke of Sutton Mandeville Excerpts

Wednesday 1st December 2010 Grand Committee

[Lord Brooke of Sutton Mandeville]

My Lords, I have not been provoked to rise by what the noble Lord, Lord Eatwell, said about the Department for Culture, Media and Sport, in which I once had the privilege of serving as a Minister. I, too, had that experience with it after I left, so I know exactly what the noble Lord meant. On the other hand, when the Department for Culture, Media and Sport was set up and was given the job of handling listed building consent, the Department of the Environment, whence that function came, had to employ Chinese walls when both departments were deciding which building should be listed and were giving listed building consent for the alteration or destruction of buildings, and there was no question at all that it was an enormous plus to have matters dealt with in two different departments. Therefore, in that respect, I have some sympathy with the amendment moved by my noble friend Lord Higgins.

[Lord Higgins]

My Lords, as I indicated earlier, what the Minister has proposed seems to be in line with the intention behind the amendment—namely, that the OBR and Treasury staff should not mix together over coffee or whatever. Should the situation be reversed at some point in the future, that may or may not happen. In any event, I am satisfied with the Minister’s reply and beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Higgins]

My Lords, one could look worldwide and still fail to find better experts on the practical implications of this amendment than the noble Lords, Lord Burns and Lord Turnbull. There are obviously considerable practical problems and the Government have to face up to the fact that if these are insurmountable, then the argument that the previous arrangements on forecasting were biased and subject to ministerial interference and so on will be difficult to sustain if precisely the same people are making the forecasts now as were making them before.

The Minister shakes his head and I look forward to reassurance from him. However, one cannot simply let it rest and say that it does not matter because they are the same people. Given the overall intention of the creation of the OBR, one has the political problem that it should be seen to be independent.

[Lord Brooke of Sutton Mandeville]

My Lords, perhaps I may make an analogy which is completely separate from that that we have been discussing. The SAS is now one of the finest fighting forces in the world, frequently in much demand from the United States Army to work in conjunction with it. That organisation was founded in the desert in 1942 and people were asked to volunteer to join it. If they had been asked to resign all relationship with their previous regiment, I am not at all sure that they would have joined at that stage; nor that we would have had evolving out of 70 years of history the remarkable fighting force that we have.

[Lord Sassoon]

My Lords, we need to step back and, in answer to the fundamental challenge of my noble friend Lord Higgins, remind ourselves of just what is going on here. We need to remember that the people who were making these forecasts under the old way of doing it were essentially Ministers and their advisers, who plucked out from the numbers that the fine Treasury officials were putting in front of them, in some non-transparent way, the forecasts and published them.

In the new construct of the BRC we have Robert Chote and his two fellow members as the body charged with producing the forecasts. We should not lose sight of the fact that that is where the fundamental responsibility for decision on the forecasts will be made. What is needed under the new model—as it was under the old model—is the best possible group of forecasting expertise. The Government recognise that, yes, it needs to be independent and expert. The principal guardians will be the three independent members of the OBR, who must be allowed to hire the best staff. The arguments put forward by the noble Lords, Lord Turnbull and Lord Burns, and my noble friends Lord Newby and Lady Noakes are very persuasive. We do not want in any way to constrain the OBR from hiring and firing whoever it wants to hire and fire. But if we were to exclude it taking civil servants because civil servants would have to resign from the Civil Service, with all the consequences that that might mean for their terms of employment, pension and so on, that would significantly reduce the pool of relatively talented people that the OBR should be able to employ.

Sir Alan Budd, in his advice on the permanent OBR, noted the benefits of the office being established as a Civil Service employer. The noble Lord, Lord Myners, makes an important point, which is that as well as the OBR having freedom, the non-executive directors will take on a role, which is to consider the overall mix of people. There is not remotely a question of complacency here, but we should not invent a problem where there is not one and significantly restrict the potential pool of relevant expertise on which the BRC will need to call.

In answer to some of the questions from the noble Lord, Lord Barnett, about the situation at present, the OBR has 13 full-time staff. They are Treasury employees on secondment because, for as long as it takes noble Lords in this House and Members in another place to pass the legislation, they cannot be employed by anyone else. As soon as the legislation is passed and we put the body on a statutory basis—the sooner, the better, I say—lots of things will be put on to their proper basis, because the OBR will under paragraph 8(1) of Schedule 1 become an employer in its own right. Under the well established terms for Civil Service employment, staff can be transferred, remain within the Civil Service and maintain their Civil Service terms and have the ability to move. They might not necessarily move back to the Treasury, but take a completely different direction in their career.

There are 13 staff now supporting the BRC. Of the three BRC members, Robert Chote is full time and Stephen Nickell and Graham Parker are working, on average, three days a week at the moment. There is no question about the non-execs, because they do not exist. That is how it is at the moment. As the noble Lord, Lord Turnbull, indicated, the expectation is that the steady state of the OBR will be about 20 employees, but that is a matter for Robert Chote. He will make those decisions.

Autumn Forecast

Lord Brooke of Sutton Mandeville Excerpts

Monday 29th November 2010 Lords Chamber

[Lord Sassoon]

I am grateful to my noble friend for pointing out the huge success of the pharmaceutical and biopharmaceutical industry in this country. That is why it is so welcome to have the news today that GlaxoSmithKline is putting further facilities into this country that will only enhance the position of the United Kingdom in that critically growing sector of the economy. I am sure that the pharmaceutical companies fully recognise that, in the announcement made last week by my right honourable friend the Home Secretary, intra-company transfers of employees were taken out of the immigration cap. That means that skilled employees of multinational companies can be brought freely into this country, and for those earning more than £40,000 there will be no time limit on the length of time they remain in this country. My right honourable friend is very aware of, and has recognised, the importance of skilled industrialists and others being able to get employment in our growing industries.

[Lord Brooke of Sutton Mandeville]

My Lords, while enjoying the historical intervention of the noble Lord, Lord Soley, does my noble friend recall the remark of the Leader of the House in the wind-up to the Queen's Speech debate of 1951 when he said that all incoming Governments find skeletons in the closet, but his Government had found them swinging from the chandeliers? Secondly, does he recall the conduct of Mr Butler's economic policy between 1951 and 1955? Finally, does he remember that at the 1955 general election the Conservatives tripled their majority?

[Lord Sassoon]

Well, I have now been reminded. I was not quite around at the time, but I am very grateful to my noble friend for reminding us of these important lessons of history.

Budget Responsibility and National Audit Bill [HL]

Lord Brooke of Sutton Mandeville Excerpts

Monday 29th November 2010 Grand Committee

[Lord Eatwell]

I have a couple of comments to make on the amendments. With respect to the engagement of my noble friend Lord Myners in the House, that was increased by the noble Baroness, Lady Noakes, from the other side, who kept him working hard.

On the remarks with respect to the charter, there is a good point. The Economic Affairs Committee of your Lordships’ House takes a long-run view on fiscal affairs, which is what you want to get into this charter. It is about the whole philosophy that the Government have talked about. In the examination of the Finance Bill by the sub-committee of the Economic Affairs Committee, there is tremendous expertise considering technical aspects of fiscal policy. To quote another example of involvement by your Lordships’ House, I had the privilege of serving on the pre-legislative committee on the Financial Services and Markets Bill, which was a committee of both Houses. It enormously improved the Bill before it got to the legislative stage and saved a lot of time in the House.

With respect to the charter, my noble friends and the noble Lord, Lord Higgins, have hit on an absolutely central and valid point. On the amendment referring to appointments, it might be a little cumbersome unless we put the two committees together. What if the two committees disagreed? It would all become rather messy, so I am rather agnostic on that. The key amendment is Amendment 35. My noble friends have spotted an obvious oversight in the drafting of Schedule 1. Of course, the OBR should provide evidence to the relevant committees of both Houses. I am referring to evidence that is within the terms of its remit as defined in the Bill. If it is independent, it should be shown to be such by providing evidence in that way. We ought to have the word “reasonable” here so that reasonable requests for attendance can be made. After all, the OBR is rather small, and it cannot be attending things all the time. Whether the drafting is appropriate, I am not sure, but it is an entirely sensible point that when necessary the OBR should appear before committees in your Lordships’ House.

[Lord Brooke of Sutton Mandeville]

My Lords, I apologise to the Committee if I have acted improperly by rising after the noble Lord, Lord Eatwell. I tried before.

The noble Lord, Lord Higgins, and I at different stages in our lives were Treasury Ministers in different Administrations under different Prime Ministers. Both of us served for several years. Before that time, I had the privilege of serving as a Back-Bench Member on the Finance Bill when the noble Lord, Lord Barnett, was Chief Secretary. There is symmetry here with my first experience of the noble Lord as a tutor on the Finance Bill because he was extremely scathing about the first group of amendments that I tabled. My noble friend Lord Lawson of Blaby had to rescue me and explain that there was more to my amendments than the noble Lord, Lord Barnett, was suggesting. However, the reason why there is symmetry with this moment in the Grand Committee’s affairs is that the second time I moved amendments, which was the very next group, the noble Lord accepted them with enthusiasm, which was extremely good for a young pupil. We have just experienced everyone being mildly upset with my noble friend the Minister, but it is just possible that everything will be set right by what he has to say.

Two of my noble friends on this Grand Committee, as Conservative Peers, have taken opposite views of these amendments. Obviously there are things to be said on either side. I am going to extend the Minister the courtesy of listening to him, not least because that also seems to me one of the purposes of Grand Committee.

[Lord Sassoon]

Oh dear! Where do I start? I should say—because I genuinely mean it—that it is important to have full and appropriate scrutiny in your Lordships’ House of what the OBR is about. However, we must be careful. I do not want to be too hidebound by some inappropriately narrow interpretation of propriety and convention, but I think that we need to be careful about the balance between achieving full scrutiny here and not crossing inappropriate lines. We need to remember that there are a lot of important provisions in the Bill that will enable scrutiny by Parliament as a whole, so the Budget Responsibility Committee will indeed be available for Select Committee scrutiny. Its forecasts and very full analysis, which we have discussed at some length, will be laid directly before both Houses. On funding, there will be separate reporting of the OBR’s expenditure in the Treasury estimates presented to Parliament, and of course there have already been quite a number of Written Questions. The noble Lord, Lord Myners, does not always like the way that I reply to his Questions, but perhaps if he would cut them down from six to one a day, I could focus even more attention on providing him with a really good Answer. However, as he knows, Questions that he and other noble Lords send in which relate to the OBR’s responsibilities always get passed on to the OBR.

Ireland: Financial Assistance

Lord Brooke of Sutton Mandeville Excerpts

Monday 22nd November 2010 Lords Chamber

[Lord Sassoon]

My Lords, as I have explained in repeating the Statement, we take the situation in Northern Ireland extremely seriously, which is why my right honourable friend the Secretary of State for Northern Ireland and my honourable friend the Financial Secretary will go there later this week. As to the question of support for other countries in Europe, I will not give a running commentary on other countries and their economic conditions. But, as I have made completely clear this afternoon, the situation of Ireland is very different from any other country and our response has been commensurate with that.

[Lord Brooke of Sutton Mandeville]

My Lords, if it is true that relations between our two countries are the best that they have ever been, does my noble friend regard it as a happy conjuncture that we are in the situation where we can make the Statement we have made today in the interests of the old saying that a friend in need is a friend indeed? Will he also give any report on the behaviour of the Spanish and Portuguese markets during the course of today?

[Lord Sassoon]

My Lords, as I said in repeating the Statement, we have given our support for a possible contribution to a package based on a very hard-nosed assessment of what is in the interests of the UK economy. That it coincides with the fact that we have had a long history with Ireland is important, but it is purely on the assessment that it is in the interests of the UK economy that we have contributed to the possible package. As to what is going on in the other markets, I am afraid that, because I have been detained throughout the afternoon in your Lordships’ House, I have not been looking at them.

Banking: Bonuses

Lord Brooke of Sutton Mandeville Excerpts

Monday 1st November 2010 Lords Chamber

[Lord Sassoon]

My Lords, that is precisely why we want to make sure that there is a better alignment between the way that remuneration is paid and the mitigation of risk that should be there. It is precisely to get a better alignment with the risks that are incurred that we are supporting the measures that are being taken globally—limiting the amount of bonus taken up front in cash and deferring a significant proportion of bonuses in line with the proposals of the G20.

[Lord Brooke of Sutton Mandeville]

My Lords, can my noble friend remind me which Administration were in power when this problem developed?

[Lord Sassoon]

My noble friend is completely right that this problem arose under the watch of the last Administration, who implemented a one-off bonus tax that is now widely regarded to have been a failure—so we have to take the time to find a better way of dealing with this in the medium term.