Budget Responsibility and National Audit Bill [HL]

Debate between Lord Burns and Lord Newby

Monday 6th December 2010 Grand Committee

[Lord Newby]

My Lords, I am sure that all noble Lords wish that Chancellors were models of balance and completeness in the way in which they present figures, but the noble Lord, Lord Myners, is placing an unrealistic burden on the OBR if he expects it to undertake this task. For example, he uses the word “balance”; balance is not an objective fact but, to a considerable extent, is a subjective view. That goes equally for “completeness”—at what point does the failure to refer to the paragraphs on page 73 in the OBR report render the Chancellor’s statement incomplete? When the Chancellor has made a political speech on the economy, to expect the chair of the OBR to audit it, to coin a phrase, in some way as the noble Lord suggests is, frankly, impossible. While I agree with the sentiments behind the amendment, I do not think that it is workable.

[Lord Burns]

My Lords, I support the remarks of the noble Lord, Lord Newby. The noble Lord, Lord Myners, knows that what he is asking for is impossible; we also know that he can be very good at creating a little bit of mischief every now and again and we have to see this amendment in that light.

The OBR can be responsible only for its own documents; it cannot possibly hold the Chancellor to account. That is a job for Parliament, including the Treasury Committee and the Economic Affairs Committee. I can think of nothing that would make the job of the OBR more impossible than to give it a task that began to resemble this. The key thing is that the OBR has to be kept out of the political debate but the noble Lord, Lord Myners, implies that he would like to plunge it directly into that debate. I am sure he has used the amendment as a vehicle to make quite sensible points about some of the practices that occur from time to time, but the OBR will not protect us from those.

--- Later in debate ---

[Lord Newby]

We had a long debate on this issue at our previous meeting and I am not going to rehearse all the arguments. I suggested, out of frustration, that we were spending too long on this form of words, which, in slightly more words, actually had the same purpose as Amendment 31. We did not spend any time looking at it, because we were considering the amendments in order. However, Amendment 31 is clear and achieves the purpose that we sought to achieve in our debate last time, which was that the OBR, in making its assessments, obviously should take account of government economic and other policies. Equally, in the context of the second part of the subsection, the OBR’s role should not be what the noble Lord, Lord Peston, thinks it would be. It should not be able to stray and look at anyone’s alternative policies—that way madness lies. The OBR must have a straightforward remit to look at what the Government are proposing and work on the assumptions that the Government are making in their policies.

[Lord Burns]

My Lords, I agree with the noble Lord, Lord Newby. I had hoped that the purpose of the clause was to restrict the activities of the OBR to avoid it getting into political trouble. There are two clear cases where I could see this happening. One is where it is asked to continue a practice that has emerged in the past 20 or 30 years, whereby a Government ask the Treasury to cost the opposition manifesto as an election approaches. That practice has been divisive and has not suited anyone. I had hoped that this clause, by restricting the OBR to consideration of government policies, would prevent the Government or anyone else—for example, the Treasury Committee—asking it what the effect would be of implementing the Opposition’s manifesto.

The second thing that I had hoped would be avoided was getting into the sort of detailed arguments that took place in the summer about what the effects of particular packages of measures would be on economic activity, unemployment, the PSBR and so on. The remit given to the OBR by the Bill, as I read it, is to tell us what the effect would be on public finances of a whole set of government policies, taking into account the world environment and everything else, and whether or not the Government are on a sustainable path as a result of that collection of policies. That remains very challenging and is what the OBR’s job should be restricted to. It is set out early in the Bill. I had assumed that this clause was there to prevent encroachment, or a widening of the OBR’s remit to include a number of other things, all of which would lead us into a difficult area of political activity.