Charter for Budget Responsibility

Ian Swales Excerpts

Tuesday 13th January 2015 Commons Chamber

[Ian Swales (Redcar) (LD)]

I rise to support the Chancellor and in particular to draw attention to the second line of objective 3.1, which talks about “intergenerational fairness”. That is incredibly important when we discuss these issues. There is a moral aspect to balancing the books and not relying on our children and our grandchildren to pay for the deficit. I would find it particularly galling to draw a pension that my five grandchildren—they are still at school—were paying for. We have a moral duty to get a grip on this issue and ensure that we get things balanced. In its draft manifesto, my party mentions 2017-18 as the year we get the current budget into balance, and I expect that to be the platform on which we fight the election.

When we are talking about moral issues, it is also perfectly valid to talk about investment for my children and grandchildren from which they will benefit. I do not see any problem investing in the schools, roads, universities and so on that they will use, particularly when those assets are productive and help the infrastructure and economy of the country. Balancing the current budget is the right way to go, but we also need to address paying down the debt in the years after 2017-18.

The document includes extensive clauses on the welfare cap, which was widely supported in this House. I am not surprised that it was supported by the Labour party since, to quote the shadow Work and Pensions Secretary, it is going to be tougher on welfare than the Tories. I would love to hear how it is going to be tougher on welfare, because it is not selling that to the electorate. Having said that, I note that paragraphs 3.26 and 3.28 allow a future Government to change the amount of the welfare cap and items included in it simply through a vote in this House, which I guess means that it could well change in the future.

The role of the OBR features heavily in the document and the Liberal Democrats have been the only party in the past few elections to present a balanced budget to the country going into a general election. I am proud of that, but I do not believe that the OBR should be the organisation to certify and test that. It has a particular job to do and a level of impartiality that means that it should not get involved in party politics. The Institute for Fiscal Studies is already more than capable of doing that. It has been heavily quoted in today’s debate and already receives more than half its funds from the public purse, so we should rely on it to sense check the various budgets. It is in the interests of the IFS to maintain its independence in doing that.

One item not mentioned in the charter that I would like to see a lot more of is the whole of Government accounts. There is a move behind the scenes in Government to start doing proper accountancy in the public sector. As an accountant, I am stunned by how the Government account for their affairs. For example, the Government have accounted for the sale of 3G licences in a similar way to that which got the Tesco management into huge trouble. We do not account properly for our pensions liabilities and the way we do our accounting has led to the huge scandal of the sleight of hand in the private finance initiative that has cost taxpayers dearly. I hope that in future charter updates the whole of Government accounts will be a key plank of the Government’s strategy for fiscal responsibility.

We are living in difficult times. We had a huge economic crash and it is amazing that the people who crashed the economy are now seriously suggesting that they should have the keys back. We had chronic neglect of the north of England and of manufacturing in particular under the previous Government while they added 1 million people to the public sector payroll. All that was disastrous for my constituency of Redcar. The Liberal Democrats have a clear plan. We want to cut less than the Tory party and borrow less than the Labour party. We think that that is the right way forward to a stronger economy and a fairer society.