Budget Responsibility and National Audit Bill [HL]

Debate between Lord Burns and Lord Myners

Monday 31st January 2011 Lords Chamber

[Lord Burns]

My Lords, the noble Lord, Lord Eatwell, describes his proposed change from at least five years to at least three years as “crucial”, but his whole argument as set out implies that, on all occasions, the non-executive committee would choose to have this review at the very end of the period during which it is allowed to have the review. I cannot for one moment imagine that that is what it would do. If we are to have confidence in the non-executive committee that is being set up in the Bill, it seems to me that we have to give it quite a lot of discretion about the timing of when it thinks it is appropriate to have a review. That will be governed in part by the extent to which the outcome of the work of the OBR comes under criticism, the extent to which we think there are lessons to be learnt. I am content with the five years not because I think the review should take place every five years, but because I think that the onus should be upon the non-executive members to take the decision about the timing—one should not box them in too much.

By bringing this forward and suggesting that it should be every three years, we are setting a clear timetable as to when those reviews will take place, rather than leaving it in the hands of the committee that is being set up in the Bill to make that decision. I hope that the noble Lord, Lord Eatwell, will reflect on the emphasis that he has given to this five-year period and his interpretation that the committee will always let it run the full length. I would rather show more confidence in the role of the non-executive body and give it discretion as to when is thinks is an appropriate time to have that review in the light of circumstance and events and how the work of the OBR is seen.

[Lord Myners]

My Lords, I support Amendment 6 to Amendment 5. I was not in the House for the beginning of Report, but I add my congratulations to those that I understand were expressed to the Minister on rejecting the advice that Ministers so often receive to resist and instead listening carefully to what was said by all sides in Committee, taking that into consideration and bringing forward a set of very constructive and welcome amendments. That shows the House performing its correct and proper function of revision, being professional and efficient, enhancing the quality of the Government’s intention and not unduly delaying the House in so doing.

I repeat my support for the concept of the Office for Budget Responsibility. I hope that, just as the Minister reminded us during Oral Questions that the previous Government established the Monetary Policy Committee which is now an important part of our financial and economic infrastructure, the OBR will be a similar testament to this Government’s contribution to building a sustainable and effective architecture. However, I support the amendment put forward by my noble friend Lord Eatwell because it seems to me that the symmetry between the electoral cycle and five years is simply inappropriate for something which should be established to stand well apart from day-to-day politics and the electoral cycle.

It is particularly important that the work of the OBR should be subject to independent review in a shorter period than five years at commencement. It is new, and it is going to be establishing a lot of new ways of working and new formats for reporting that no doubt will evolve over time. It would be unfortunate if we did not have a chance to stand back and look at how it was performing and how its contribution could perhaps be further enhanced before five years had elapsed—before we got to 2016.

There is a strong reason for having these reviews in periods of not more than three years, rather than in periods of not more than five years, as proposed. However, the noble Lord, Lord Burns, is right to remind us, as I am sure the Minister will in his closing speech, that the current draft says that, as it should not be more than five years, it could well be that the committee, the membership of which has not yet been selected or identified, could choose to make the reports earlier. For the purpose of good order and good process and, frankly, to strengthen further the integrity of the OBR and the confidence that it will be able to sustain from the broader public, these reviews should take place more frequently than once every five years. Once every three years would be a better outcome. It is for that reason that I support Amendment 6.