Budget Responsibility and National Audit Bill [HL]

Debate between Lord Burns and Lord Higgins

Monday 31st January 2011 Lords Chamber

[Lord Higgins]

My Lords, given that I was chairman of the Treasury Committee in another place for something like 14 years, I am naturally rather sympathetic to the amendment. However, it does not seem to do what the noble Lord, Lord Eatwell, said it does. It does not enable the Treasury Committee to control the budget, but enables it to ensure that the budget is scrutinised after being published. This is something which my noble friend should readily accept, because it would be very surprising if the annual operations budget were not to be published. I should have thought that that was consistent with the whole argument for transparency which we have heard from the Government throughout the debates on this Bill, and that it should be virtually automatic. It is equally likely that the Treasury Committee would wish to scrutinise the budget, once published. My noble friend might of course argue that it is unnecessary for the amendment to be made, but, if it were, some reassurance would be given to those expressing the kind of view expressed by the noble Lord, Lord Eatwell. It would certainly be right for the budget to be published and for the appropriate body to look at it to be the Treasury Select Committee in another place.

[Lord Burns]

My Lords, I will disappoint the noble Lord, Lord Barnett, by agreeing with the amendment, or rather with its spirit, because it is important that the funding of the OBR is as transparent as possible. We need an arrangement that will last. We all know that the Treasury has great power and I accept the argument that the OBR needs the protection of a transparent process. Of course, nothing would in the end prevent the OBR from suffering in respect of its budget if the Government wished that to happen and could get the support of Parliament, but it is important that that process should be transparent. I recognise the argument that it is already evident from the public expenditure process that there is nothing to stop the Treasury Committee being involved, but I support the principle of making a specific provision for the funding of the OBR that should be as transparent as possible.

The detail in the amendment that I am not happy with is the suggestion that the committee should investigate the annual budget. It is important that if you are to have a successful operation such as the OBR, it should know what the prospects for its finances are, stretching beyond one year. Subjecting it to an annual budget process might not do the job. The noble Lord, Lord Eatwell, already referred to Sir Nicholas Macpherson’s existing letter talking about a financing process that stretches some way ahead.

I therefore support the principle of the amendment and hope that it is possible to find a way of expressing its intentions that provides reassurance that a transparent process will be in place and will stretch for somewhat longer than the annual budget round.

Budget Responsibility and National Audit Bill [HL]

Debate between Lord Burns and Lord Higgins

Wednesday 1st December 2010 Grand Committee

[Lord Higgins]

My Lords, I presume that the Minister will confirm whether the budget is going to be published. If it is, clearly the Treasury Select Committee could have a look at it if it wished. It seems more likely, however, that it would be examined by the Public Accounts Committee rather than the Treasury Committee, having already been looked at by the Comptroller and Auditor-General.

[Lord Burns]

My Lords, I support the spirit of this amendment for the reasons put forward by the noble Lord, Lord Eatwell. I am sure that no problems with the budget will arise during the early years of the existence of this body. Indeed, it has probably already been agreed in the present expenditure round. But if we are going to safeguard the OBR into the future, it is necessary to have a system of public accountability and the opportunity for the executive members and perhaps the non-executives to be questioned by the Treasury Select Committee whether they think the resources being made available to them are sufficient to do the job. On this occasion, I disagree with the noble Lord, Lord Higgins, because this is an issue that falls to the Treasury Select Committee as the body with oversight of the extent to which the OBR is doing its job effectively.

In most cases I suspect that these issues would arise naturally, without having to include them in the Bill, so I shall listen carefully to what the noble Lord, Lord Sassoon, has to say in reply. As I said, however, the spirit that is captured in the amendment is an important safeguard in terms of the future of the OBR. That is because in five or 10 years’ time, the circumstances surrounding the body may be very different.

--- Later in debate ---

[Lord Higgins]

When we consider my amendment which refers to Clause 5(3), I shall make a quite separate point. The noble Lord, Lord Newby, has essentially encapsulated what he wants to say. The problem for the Government is that we are saying that the OBR has to take into account the Government’s economic policy, whereas the noble Lord’s letter—and the debate on that lasted for an hour and 20 minutes on our first day in Committee—was concerned with saying that we must not under any circumstances allow the OBR to look at economic policy.

[Lord Burns]

There is an issue with the drafting of Clause 5 and I wonder whether we are trying to make subsection (3) work too hard for its living. I had assumed that it was there to make sure that the OBR did not get dragged into a political debate and would not be called upon by anyone to cost opposition policies—which, as we know, has become a bit of a habit over the past 25 years—or by a Select Committee to insist that it compared the outcome of the Government’s policies with that of another set of policies. That would inevitably draw the OBR into a political debate. I had assumed that that was the purpose of this subsection, and it may be working it too hard to say that it should also do the job suggested by the noble Lord, Lord Eatwell. I think that the noble Lord, Lord Newby, has captured the spirit of what a number of us have been concerned about.