PARLIAMENTARY DEBATES HOUSE OF COMMONS OFFICIAL REPORT GENERAL COMMITTEES

Public Bill Committee

BUDGET RESPONSIBILITY AND NATIONAL AUDIT BILL [LORDS]

Second Sitting Tuesday 1 March 2011 (Afternoon)

CONTENTS

CLAUSES 4 to 8 agreed to. Adjourned till Thursday 3 March at Nine o’clock.

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The Committee consisted of the following Members:

Chairs: MR ROGER GALE,†DR WILLIAM MCCREA

† Docherty, Thomas (Dunfermline and West Fife) † Morrice, Graeme (Livingston) (Lab) (Lab) † Morris, Anne Marie (Newton Abbot) (Con) † Gilmore, Sheila (Edinburgh East) (Lab) † Nuttall, Mr David (Bury North) (Con) † Goodwill, Mr Robert (Scarborough and Whitby) † Patel, Priti (Witham) (Con) (Con) † Shelbrooke, Alec (Elmet and Rothwell) (Con) † Greening, Justine (Economic Secretary to the † Smith, Julian (Skipton and Ripon) (Con) (South West Norfolk) Treasury) † Truss, Elizabeth (Con) † Williams, Stephen (Bristol West) (LD) † Hames, Duncan (Chippenham) (LD) Wilson, Sammy (East Antrim) (DUP) † Jones, Graham (Hyndburn) (Lab) † Leslie, Chris (Nottingham East) (Lab/Co-op) Alison Groves, Committee Clerk † McCarthy, Kerry (Bristol East) (Lab) † McGovern, Alison (Wirral South) (Lab) † attended the Committee 41 Public Bill CommitteeHOUSE OF COMMONS Budget Responsibility and National 42 Audit Bill [Lords] a difference in society then there can be no better cause Public Bill Committee than the eradication of child poverty. To do that we must ensure that the targets and ultimate goal in the Tuesday 1 March 2011 2010 Act are met. As my hon. Friend the Member for Bristol East reminded us earlier, the current Government have yet to publish a national child poverty strategy, so (Afternoon) there is nothing in place at the moment to ensure that the requirements of the Act are implemented. What would be better than a duty placed on the OBR to [DR WILLIAM MCCREA in the Chair] ensure that that happens? As my hon. Friend the Member for Nottingham East Budget Responsibility and National Audit so eloquently stated, it is important that we move away Bill [Lords] from the mindset of structures, processes and inputs that sometimes become the dominant force in much of what we do towards a culture of outcomes and putting Clause 4 people first. I say that in a non-partisan fashion as we can all be guilty of that, regardless of party politics. The MAIN DUTY OF OFFICE important thing is to recognise it so that we make the Amendment proposed (this day): 12, in clause 4, page 2, changes to bring about the difference. On the basis of line 20, at end insert— ‘The Office shall also examine my positive outlook and reasoned argument, I am sure and report on the impact of Treasury policy on the that the Minister will now discard her shackles, denounce duties of the Secretary of State under section 2 of the her fetish and accept the amendments as tabled—or Child Poverty Act 2010.’.—(Chris Leslie.) perhaps not. Seriously, child poverty is a scandal. I recently met 4pm John Dickie, the head of the Child Poverty Action Question again proposed, That the amendment be Group in Scotland. I was shocked to learn that despite made. the country’s undoubted wealth, a staggering one in four of our children live in poverty. The latest official The Chair: I remind the Committee that with this we statistics suggest that recent progress in reducing child are discussing the following: poverty has stalled. I fear that with the Government’s deficit reduction measures, that situation will only get Amendment 13, in clause 4, page 2, line 20, at end worse. insert— ‘The Office shall also examine and report on the impartiality of I have little doubt that we all agree with the objective the local government finance settlement as it is applied across of eliminating child poverty by 2020. That is vital to the local authorities in England.’. well-being of the country and a true mark of a decent Amendment 8, in clause 4, page 2, line 20, at end and civilised society. Why not give that objective the insert— credibility that it deserves and place it firmly within the remit of the OBR? ‘(1A) Sustainability will be defined in its reports by the Office and will include, but not be limited to, consideration of public Amendment 13 places a duty on the OBR to examine sector net borrowing, national debt, gross domestic product, and report on the impartiality of the local government economic growth, employment and risks to UK finances.’. finance settlement in England. This is an important Amendment 9, in clause 4, page 2, line 27, leave out amendment due to the highly partisan nature of this ‘one occasion’ and insert ‘two occasions’. issue, regardless, to be fair, of which Government are in Amendment 10, in clause 4, page 2, line 30, at end power. With the abolition in England of the Audit insert— Commission, which is a great mistake by this Government, there is now a significant gap in the independent, ‘over the next five years.’. authoritative and impartial assessment of local government Amendment 11, in clause 4, page 2, line 37, at end finance in England. That contrasts sharply with the add— situation in Scotland in which the Accounts Commission ‘(7) The Office will take an active role in informing public is highly regarded by both local and national Government debate on fiscal sustainability and will convene a fiscal and works well. With the abolition of the Audit Commission sustainability research committee of interested authorities in the in England, it makes sense to place a duty on the OBR public and private sectors.’. to conduct an impartial assessment of the English local government grant settlement, thereby greatly reducing Graeme Morrice (Livingston) (Lab): May I add to the the partisan rhetoric on this issue by all parties. plaudits that we heard this morning with regards to Finally, although it is not mentioned in the Bill as far your benevolent chairmanship, Dr McCrea? as I can see, will the Minister address the proposed I want to comment on amendments 12 and 13, tabled relationship between the OBR, which is a UK body, by my hon. Friends the Members for Bristol East and and the devolved Administrations, particularly the Scottish for Nottingham East. Amendment 12 places a duty on Parliament with its fiscal powers and those proposed by the Office for Budget Responsibility to examine and the Scotland Bill? report on the impact of Treasury policy on the duties of the Secretary of State under section 2 of the Child Poverty Act 2010. I wholly concur with my hon. Friend Thomas Docherty (Dunfermline and West Fife) (Lab): the Member for Nottingham East, who moved the I apologise for not being here for the very end of this amendment. He said that if we are serious about making morning’s debate—the hon. Member for South West 43 Public Bill Committee1 MARCH 2011 Budget Responsibility and National 44 Audit Bill [Lords] Norfolk and I attended a Westminster Hall debate. I Thomas Docherty: I am grateful to the hon. Gentleman, regret missing the chance to serve under your stewardship but I am concerned that he seems to be suggesting that for that half hour, Dr McCrea, and it also appears that the Secretary of State has sought an element of retribution I missed a fascinating debate about fetishes. I look against those councils. forward to receiving the record, so that I can see how the issue was discussed. Alec Shelbrooke: I take issue with the word “retribution.” I shall speak briefly to amendment 13, which centres That is not the word; the word is “rebalancing.” on local authorities. I shall stay away from the issue of Scottish Ministers, because I fear that if I addressed Thomas Docherty: The Secretary of State has many that debate for too long, you would rule me out of words for it. There is a fascinating debate to be had order, Dr McCrea. I shall keep my thoughts on that about funding settlements for local authorities over the until we get to the clause stand part debate. past 30 or 40 years. I believe that it would be within the The local authorities of England spend billions of bounds of the debate to say that we had exactly the pounds each year, despite the best efforts of the Secretary same problems in the 1980s, when urban, northern of State for Communities and Local Government to councils were starved of funding. The motivation behind slash their budgets by 56%. Unlike many colleagues in some of those decisions in the 1980s was political, on this room, I have never had the privilege or honour of the part of the Secretaries of State for the Environment, serving as a member of a local authority—some colleagues as they were known at the time—before a fancy new present have acted as leaders of councils and conveners. title came along. In the 1990s and the early part of the I would not, however, wish to be a councillor in the past decade, under a Labour Government, a rebalancing coming financial year, because incredibly difficult and of the deficit that those local authorities had suffered painful decisions have to be made. I am sorry to dissent from was absolutely right. I can assure the hon. Gentleman from the remarks of my hon. Friend the Member for that retribution and revenge were not behind the actions Livingston, but the level of pain will be much worse of Mr Prescott—now Lord Prescott—and others on the under this Government than it would have been under a funding settlement, which is not the case with the Labour Government, because of the Secretary of State’s Secretary of State for Communities and Local Government. heartless and callous decision to make brutal cuts to the Moving on to the issue raised by the hon. Member funding of local authorities. for Newton Abbot—the role of the OBR—I was lucky enough to go on an exchange programme organised by Graeme Morrice: I totally concur with that comment. the British-American Parliamentary Group in September last year. Its work will be familiar, and many Government Members will have the opportunity to go to the United Thomas Docherty: I am grateful for that clarification. States on that useful exchange programme, which is funded by the State Department and the Foreign Office. Anne Marie Morris (Newton Abbot) (Con): I am I was there with the hon. Member for Bristol West who, absolutely fascinated by everything that the hon. Gentleman unfortunately, does not seem to have been able to join has to say, but I am concerned about its relevance. If the us yet in Committee. OBR took on all the duties suggested by the Opposition, We had an opportunity to meet with the US Congress it would not be focused and I am not convinced that it and to get a better understanding of the role of the would do the job that we want it to focus on. I would Congressional Budget Office and the other scrutiny appreciate the hon. Gentleman’s comments on that. mechanisms. They have quite a wide remit, in terms of what they look at in the States, both in the federal Thomas Docherty: I am grateful for that intervention, set-up and at the state level. It is correct, as my hon. and I might address the issue in a moment. Friends the Members for Nottingham East and for It is interesting that the well-known hard-left newspaper, Bristol East have said and tried to achieve in their The Times, which is owned by the Marxist revolutionary, amendments, to widen the scope of the OBR’s remit Rupert Murdoch, made it clear a few weeks ago, just somewhat, but not dramatically. It is probably fair to before Christmas, that the 10 local authorities in England say that the local authorities in England spend more that suffered the most brutal cuts were all Labour-controlled collectively than almost any other Department, except councils in the midlands or the north of England, while perhaps for the national health service and the Ministry the councils that had the best settlement—indeed, one of Defence—I seek clarification from the Minister if I or two received a rise in their funding settlement—were have got that wrong. all under Liberal and Conservative control in the south of England. Anne Marie Morris: I hear what the hon. Gentleman says but, because something works in the US, it will not Alec Shelbrooke (Elmet and Rothwell) (Con): The necessarily work here. I am not sure how child poverty, problem with the hon. Gentleman’s statements is that important as it is, and local government can be picked they are based on a snippet of time. It may well be true out as the two prime examples. Taking his argument to that Labour councils have had larger cuts inflicted on its logical conclusion, we should be taking on a number them than Liberal and Tory councils, but if we look of other things, but we then get to the point where we back over history, we will see that those councils were are dealing not only with the Treasury but with a starved of money. Certainly, my own council—Leeds number of other Departments and the situation becomes city council—had by far the lowest settlement of any of completely unmanageable. the metropolitan councils when it was under a Tory-Liberal administration. Neighbouring administrations as close Thomas Docherty: I am grateful to the hon. Lady as Wakefield and, of course, Manchester had almost who, with her probing questions, is clearly giving some double the settlement per head of Leeds. thought to how she will be voting. 45 Public Bill CommitteeHOUSE OF COMMONS Budget Responsibility and National 46 Audit Bill [Lords] [Thomas Docherty] I therefore struggle to understand why asking the OBR to do a report into the sustainability of local authorities’ Such scrutiny is absolutely right for local authorities, public finances does not fall within that scope. That is given what a huge part of the Budget they take from the on page 2 of the document she has in front of her. central Government. Local authorities can also raise their own revenue. One of the key aspects of the OBR is Justine Greening: The hon. Gentleman makes an looking at the financial stability of public institutions, interesting comment, but that is not what his amendment and I can think of no better example of a public says. [Interruption.] I can see him taking advice from institution with revenue-raising abilities but an uncertain his Front-Bench team and I am happy to listen. financial future than the local authorities. Also useful, as the carefully worded amendment 13 makes clear, is the fact that such scrutiny would take some of the Chris Leslie (Nottingham East) (Lab/Co-op): The rhetoric and debate out of the issue. Minister’s comments are illuminating, as she is obviously melting to the persuasive argument my hon. Friend is making. Perhaps he can encourage her to table a more The Economic Secretary to the Treasury (Justine refined, finessed amendment if she feels that just talking Greening): The hon. Gentleman is absolutely right that about the impartiality of the settlement is insufficient. local authorities should be scrutinised in that way— Perhaps it should be widened to include the sustainability presumably by the OBR. Does he want the OBR to have of local public finances as well. Surely that would be the a scrutiny role and then to pass some kind of judgment? best way forward. How does he square that with the need for the OBR to be totally independent? Thomas Docherty: I am grateful to my hon. Friend. What confused me, Dr McCrea, was that earlier this Thomas Docherty: I am not sure why we cannot have morning, prior to the fascinating debate about fetishes, scrutiny and independence at the same time. Perhaps I we had a clear indication from the Minister that she felt have misunderstood the Minister’s question, but surely that one could be over-prescriptive in an amendment. the point is for the OBR to provide Parliament with Perhaps in my youthful naivety I had assumed it was a independent analysis of the financial footing of local given that, as part of the work on local authorities, authorities. financial sustainability would be looked at. I am deeply Something I learned from my visit to the US is that sorry if that is not the case. individual states are basically going bankrupt, because they are spending more money than they are bringing in Alec Shelbrooke: If the hon. Gentleman will indulge from their various revenue streams, whether from federal me, I would like to intervene and then come back again. funding or what they raise through taxation. There is a First, does he feel that the Audit Commission kept local strong suspicion—I stick purely to England for the government finances in check and working as efficiently purposes of the amendment—that many local authorities as they should have? are in grave danger of going bankrupt in the next 12 to 24 months. We see local authority after local authority having to make painful decisions. Even the smallest Thomas Docherty: According to my first-hand experience local authorities and Conservative councils are having of Scotland, it certainly did. Do I think that it perhaps to lay off huge numbers of staff. It is right to have an lost its way somewhat? Of course I do. Do I think that independent body to scrutinise fiscal policies at local simply scrapping it will help the public finances? Of authority level and determine, first, whether they are course it will not. I very much hope that the Secretary of able to deliver services, and secondly, whether their State, even at this late stage, will reconsider his decision projections for expenditure match those for income. I to abolish the Audit Commission. struggle to understand why the Minister does not think a body can be independent and take that scrutiny role. Alec Shelbrooke: The hon. Gentleman is being most If she could clarify what she meant I would be happy to generous in giving way and I am grateful for that take another intervention. answer. We could look at the settlement that has just happened in the Leeds metropolitan council. The Audit 4.15 pm Commission identified a huge amount of money being wasted in the purchasing of stationery and so on, Justine Greening: The bottom line is that the amendment simply because council employees purchased it willy-nilly the hon. Gentleman is proposing does not talk about from a catalogue. If it had been added to the bulk order, that. It talks about a role for the OBR in determining a 70% discount would have been available. The amendment whether the local government finance settlement is impartial. refers to He may have a point, but it is not related to the “the impartiality of the local government…settlement”. amendment he is apparently supporting. A truly independent OBR would look at the settlement being given and the structures in place and probably Thomas Docherty: I am a huge admirer of the Minister, agree that the settlement was reasonable. The recent but I draw her attention to page 2 of the explanatory amendment to the Leeds budget to save 10% on the notes, which I assume she had some part in preparing. stationery budget to keep the leisure centres open was It says: voted down, but I am sure that the OBR, with its full “Clause 4 describes the functions of the Office. Its main duty independence, would consider that reasonable and might will be to examine and report on the sustainability of the public imply that the Government were not impartial in the finances.” local government settlements. 47 Public Bill Committee1 MARCH 2011 Budget Responsibility and National 48 Audit Bill [Lords] Thomas Docherty: I am grateful to the hon. Gentleman achieve? There may be better ways—obviously, the Minister for that. I have been slightly confused. I have always may be able to suggest some—to measure and assess the believed that some Members on the Government obligations under the Child Poverty Act 2010 than by Benches—there are no Liberal Democrat Members here— giving the task to the OBR, but, at the moment, it seems are quite consistent, and I am surprised he does not that there is a gap and that that will not be looked at in support his party’s document published in February as much detail as it should. 2009. I thought that that would be the basis for the We are setting set up a body which I hope will be truly Government’s thinking, particularly with no Liberal independent, which can look both forward and back at Democrat Members around—perhaps they have forgotten some of the decisions that are made, and which can give that they have a job to do today. That document says: a projection of the likely effects of some of the steps “The Audit Commission will be given a specific duty to report that are taken. I would argue that it needs a slightly on whether the basis for allocation is”— wider framework. wait for it— “transparent and in accordance with objective criteria set out by Justine Greening: We have had interesting debates Ministers.” before and after lunch. I shall briefly run through the amendments in turn to address the issues that have been I appreciate that compromises have been made, and raised, but I would say to Opposition Members that Labour Members want to help our Conservative colleagues. they cannot have it all ways. We are about to come on to Given that the Audit Commission is being scrapped, we clause 5, which deals with the key principles on which want to provide the next best thing—the OBR and the the OBR will run—basically, they are objectivity, specific promise that the hon. Member for Elmet and transparency and impartiality—which I believe we would Rothwell gave to his constituents to have transparent all agree are critical. However, the amendments are and independent auditing of the funding settlement. starting to prescribe what the OBR should do, in spite The Minister made an excellent point about the wording, of the desire to which the hon. Member for Edinburgh and I am sure that if she introduces such an amendment East just referred for it to be completely independent. It later during the Committee or, if that is not practicable, cannot be completely independent if it is being told on Report, my hon. Friend the Member for Nottingham what to do in the kind of detail contained in amendments East could be charmed into withdrawing his amendment. 12 and 13. I shall come to them in a little more detail in a second. Sheila Gilmore (Edinburgh East) (Lab): I should like On amendment 8, which is about sustainability, it is to speak to amendment 8 and briefly to amendment 12. right, as the hon. Lady just said, that sustainability is a It is important to examine sustainability as broadly as broad concept that has a multitude of different dimensions. possible, without being so broad that it is outwith the That was debated in the other place. I want to reassure realms of what the Office for Budgetary Responsibility members of the Committee that the Government intend will do. If we concentrate narrowly on deficit and to amend the charter to require the OBR to set out how financial issues, other issues are, in my view at least, it will approach sustainability in each of its reports. ignored. Much has been made at various times—we Hopefully, we can maintain the OBR’s independence have touched on this briefly—about the intergenerational but encourage it to be clear about sustainability and issue and intergenerational fairness. how it considers it. A frequent argument for reducing the deficit as fast Chris Leslie: I am interested to hear that the draft as possible is intergenerational fairness, but there are charter for budget responsibility is likely to be amended other aspects of such fairness. One is whether more to broaden the sustainability concept. Will the Minister intergenerational unfairness will arise if people do not state clearly that if the OBR wishes to study the impact have jobs and there is no economic growth. We know of Treasury policies on, for example, child poverty, she that long-term unemployment, particularly youth will have absolutely no qualms about that but will in unemployment, has a marked effect on people’s entire fact welcome it? future life, and an impact on such things as social inequality. All parties seem to believe that that is an Justine Greening: I welcome the hon. Gentleman’s important issue, and have sometimes spoken about it intervention, which shows clearly that although the passionately. We must look seriously at how to achieve previous Government did not think of setting up an such fairness. Just using the words is not enough. My office for budget responsibility, now that the idea is in a argument on sustainability is that we must look seriously Bill, the Opposition have all kinds of ideas about how at a range of issues. Amendment 8 would clarify its remit could be expanded and developed. sustainability, and provide a definition that would allow At this point, we want to ensure that the core issues us to take into account a range of matters, including of objectivity, impartiality and transparency are bedded economic growth and employment. down. The hon. Gentleman has some ideas about what Amendment 12 involves part of the whole issue of the OBR should find important to look at, but we intergenerational fairness. If we are serious about tackling believe that it should be completely independent. It social inequality, as well as family poverty and particularly should be able to look at what it wants to look at. I child poverty, which is one aspect of that, we must agree that it should scrutinise Government policy only—it ensure that we measure and take account of whether we is not there to look at different scenarios. Its expertise is are achieving what we say we are achieving. Much in fiscal forecasting. At this stage, it does not have criticism has been levelled, particularly at the previous expertise in distributional analysis, for example, so he is Government, for measuring too much and having too getting slightly ahead of what it is doing at present. many targets, but if we do not measure, how will we What is critical is that it is entirely independent and able ever know whether we have achieved what we want to to do the analysis it wants to do. 49 Public Bill CommitteeHOUSE OF COMMONS Budget Responsibility and National 50 Audit Bill [Lords] [Justine Greening] Chris Leslie: I think I understand the logic behind the Minister’s keenness to resist the expansion of the duties Page 11 of the charter sets out the OBR’s remit, listed in clause 4. However, as my hon. Friend the which can be modified over time. We have debated the Member for Dunfermline and West Fife has already process by which that would happen—a resolution must said, adding a duty to test the impact of Treasury policy be agreed by the House to change the charter. The key on child poverty would not in any way jeopardise the point is that the OBR has to be entirely independent, OBR’s independence. and be seen to be so. That point was made clearly by the Is the Minister saying that it would be more appropriate Treasury Committee. As we will go on to discuss shortly, to look at the charter’s objectives and the mandate for it is one of the reasons why we have been so careful to those specific elements of sustainability? After all, the develop a good process for choosing the chair of the objective mentions intergenerational fairness and the OBR. We have been careful to ensure that that person effectiveness of monetary policy. To the degree that goes through a process of pre-appointment scrutiny the charter is specific, is she suggesting that it would be and is approved by the Treasury Committee. more appropriate to amend the charter to include, for example, the duty to test the child poverty impact? 4.30 pm Thomas Docherty: I was in this very room less than a Justine Greening: The answer to that is no. month ago during the Armed Forces Public Bill Committee’s discussion of the military covenant. The Minister’s colleague, the right hon. Member for South Thomas Docherty: For my benefit, will the Minister Leicestershire (Mr Robathan), who is the Minister with clarify that point? I think she is saying that she is responsibility for veterans’ affairs, specifically cited three somewhat reluctant explicitly to give additional powers. examples for inclusion in the covenant report. He made Suppose that the wording of the amendment tabled by it absolutely clear that a report could be fully independent my hon. Friend the Member for Nottingham East even if Parliament laid down some examples. So I am stated that the office “may also examine” child poverty puzzled. Why has one wing of Government said that or local authorities, rather than “shall also examine”. the Government can lay down specific examples without Would the Minister be content that that was a suitable ruling out other things? This Minister seems to be form of words that made it clear that the option was suggesting that the Government cannot do that. there while also guaranteeing the independence for the body to make its own decision?

Justine Greening: I am talking in the context of the Office for Budget Responsibility, which we are addressing Justine Greening: There is no need to make that in the Bill. Clearly, the purpose of the OBR is to take a change. The Bill enables the Office for Budget Responsibility process—the forecasting of public finances and the to fulfil its duties entirely in the way it sees fit. We will sustainability of public finances—that used to be delivered soon come to clause 9 on the right to information, by the Treasury and to put it in an entirely independent under which it can request the information that it thinks body separate from the Treasury. it needs. We always had a problem with the figures’ lack of I will return to my original comments, although I am credibility. We would get to each Budget and the figures conscious that I must make progress and respond to the would be presented in the Red Book, but there would be points raised by other amendments. We must allow the no consensus on whether they were robust. The Bill sets OBR to have its independence, and the Bill sets out up an Office for Budget Responsibility, which means the context and the duties that it will have. The key to that that forecasting is done by an entirely independent success—the critical point—is that it will have the group of people. Of course, it needs to work with the independence to get on and do its job as it sees fit. The Treasury—it is trying to assess the impact of Treasury Treasury Committee, quite rightly, flags up the issue of policies contained in a Budget—but the point is that it independence as key. If we get to the position where the is doing that independently. That is why I do not think it OBR is not seen as independent, that will fundamentally is right for us already to be telling the OBR that it needs undermine its ability to deliver what we want, which is to do explicit, additional work. credible forecasting that people agree is robust. We have addressed the issue of sustainability in the charter. Members have raised their concerns. Many of Thomas Docherty: Going back to the point raised by them have talked about the importance of those issues the hon. Member for Elmet and Rothwell, my concern— in the context of the economic environment. Things which I suspect is shared by my hon. Friends the change, of course, and had we introduced the Bill at a Members for Nottingham East and for Bristol East—is different time, someone would have said that we had to that if we do not indicate in some sort of formal make absolutely sure that it covered some other area manner that the OBR may choose to examine these or that was particularly important at that time. other issues, a future Government who are more callous We are trying to ensure that the House does not get than the Minister may cut the funding off at the knees. into the business of being explicit about the things that The Secretary of State for Communities and Local the OBR should be looking at. We want to make it very Government did that to the Audit Commission because clear that the OBR should be looking at broad forecasting he does not like its policies. If we do not write down and responding to particular queries from the Government that the OBR has the power to look at child poverty, for independent analysis. The OBR should be in charge local authorities or other areas, is there not a danger of producing Government forecasts in the way that the that a future Government might claim that it has Treasury did in the past. overstepped its remit? 51 Public Bill Committee1 MARCH 2011 Budget Responsibility and National 52 Audit Bill [Lords] Justine Greening: I go back to my original comments. I also note that their former Chief Secretary to the It is clear in the Bill and the charter that the OBR can Treasury left a message for his successor that said that fulfil its duty in the way that it sees fit. I would be there was no money left. That is a very difficult thing for concerned if, at some point in the very, very distant Opposition Members to keep hearing, but the reality is, future—we hope—the hon. Gentleman’s Government even if the shadow Chancellor denies that Britain was were ever to change and challenge that. That is why we left in a financial mess, it actually was. There is no decided that it is important to have parliamentary scrutiny getting away from that. to ensure that any modification of the charter goes If Opposition Members are to be taken seriously on through a resolution and is approved by the House of the economy, they need to start to outline their alternative. Commons. Their refusenik approach to policy so far has been I do not accept what the hon. Gentleman is saying. evidenced today in their bleeding-hearts response to The Bill makes it clear that the OBR is independent and what is going on in Government policy. Well, Government needs to be impartial, and that it has to remain objective policy is in direct response to the utter mess in which the at all times. We have set it up to enable it to do that. Opposition left our public finances. However, I think that we will come to some additional My other observation is that if the Opposition want amendments that may undermine that. to be credible, they will at least have the guts to admit what they were planning to do, which was to start cutting public expenditure in April. In fact, they were Kerry McCarthy (Bristol East) (Lab): I am slightly going to cut it by about £2 billion less. If they want to be confused, as is my hon. Friend the Member for Nottingham taken seriously, perhaps at some point during the next East, about why giving the OBR the task of looking at three weeks they will set out where their cuts would be whether the child poverty target has been met would in made. At the moment, we have not had a penny from any way compromise its impartiality. Does the Minister them. suggest that it would get embroiled in making political decisions about the child poverty targets? Surely it is a simple matter. We have the Child Poverty Act 2010 and Chris Leslie: You’re in government. there are four different tests set out in that. That is clear and requires empirical analysis as to whether the target Justine Greening: Is it any wonder? What the British has been met. I do not understand why that would people recognise is that we had a plan for tackling the compromise impartiality or integrity. deficit, whereas the party that created it does not even admit that it existed. [Interruption.] Justine Greening: I am sorry that the hon. Lady and her colleagues are confused. We do not want to accept The Chair: Order. I remind all hon. Members that I the amendment because the role of the OBR is to am not in government, so you should not say “you’re” anything. I am the Chair. I have the privilege of being “examine and report on the sustainability of the public finances.” totally independent. That is its key duty, so its analysis has to be pursuant to that principal duty. The hon. Lady wants to broaden its 4.45 pm remit into an area for which it does not have the expertise. Justine Greening: Having set out why I think that the Office for Budget Responsibility needs to stick to its My other point is a fundamental point of principle. core task, for which we have set it up— Including amendments 12 and 13, which pick up specific policy areas, and saying that the Office for Budget Responsibility must look at them, is by definition starting Kerry McCarthy: rose— to compromise its independence in carrying out its job pursuant to what we are setting out in the Bill. I know Justine Greening: I shall not take any more interventions that the Opposition do not agree with that. at present; I have taken an awful lot, as I think the As with many good ideas from Conservative and Opposition will recognise. Conservative-led Governments, I worry that the Opposition Let us briefly discuss amendment 9, which would will seek to tamper and interfere—in their eyes, try to require the OBR to produce sustainability and accuracy make better—and undermine what is a very strong idea reports twice each year. There are good reasons for to set up an independent Office for Budget Responsibility keeping both reports on an annual basis. On the accuracy to provide independent forecasts. For too long, this report, sufficient new out-turn data must be available to country had a Government who did not produce merit a new assessment of forecast accuracy, and a independent forecasts and did not therefore have a second report in a year would benefit from very little credible fiscal policy, but were able to try to mask the new data with which to analyse accuracy. fact that they were taking our economy from being The sustainability report will have the broad scope prosperous to being fundamentally weakened with a that we have said it needs. The OBR has set out the structural deficit. We now have to spend time addressing range of issues that it intends to consider, including that deficit with some very difficult choices. changes to the uprating of pension benefits and to the I was interested to hear the debate on child poverty public sector work force. Such changes will require and local government finance. We know that one of the substantial work, which will take time. determinants of child poverty is whether families have An annual reporting requirement provides the OBR jobs, and I merely note that Opposition Members left with the necessary time to produce the analysis, whereas government with unemployment higher than when they with a biannual report there would be a risk of its not came in. having sufficient time for such rigorous analysis. Because 53 Public Bill CommitteeHOUSE OF COMMONS Budget Responsibility and National 54 Audit Bill [Lords] [Justine Greening] should—remain the domain of the Government. Our decisions regarding the local government finance settlement we want the OBR to be independent, however, there is are the domain of the Government and elected Ministers. nothing to stop it producing additional analysis on a The impartiality or otherwise of such decisions is inevitably more frequent basis, should it wish to. a subjective and potentially political judgment. Given Again, amendment 10 goes in the wrong direction, that we all look at its inquiry with real interest, the because it would require the OBR’s sustainability report Treasury Committee said: to focus only on the next five years. The OBR has said “The OBR should avoid being drawn into seeking to apply that it intends the report to include long-term analysis political pressure through its commentary—even thought many on the sustainability of the public finances, which will commentators”— include projections over the next 40 years to allow a full I am looking at Opposition Members— analysis of long-term trends. That is consistent with the “will encourage it to do so. The OBR, is not and should not be, sustainability analysis produced by other international running fiscal policy.” forecasting councils. We do not want to accept an I agree with that. It would be inappropriate for the OBR amendment that, far from allowing that, would to police the Government’s decisions or determine the prescriptively curtail it. “impartiality” of those decisions or otherwise. That is Amendment 11 would give the OBR an explicit role more properly a role for Parliament. in informing public debate, but the OBR has been designed to produce a broad range of reports that are accessible to everyone. It is required to act transparently Chris Leslie: The hon. Lady says that she does not to ensure that all its work, assumptions and methodology think that the OBR has a role in policing the Government’s are set out. We in this House have already spent a lot of decisions, yet they are asking the OBR to analyse and time debating OBR reports. I note that the Opposition assess the sustainability of public finances. Will she now have become fond of cherry-picking various statistics turn specifically to the point that I asked her to address from such reports, so they are clearly ones that people in respect of the “Control Shift: Returning Power to will use and scrutinise. Local Communities” document? Obviously, the Prime Minister’s face is in the foreword to the document in A careful balance must be struck between the OBR’s which the Conservative party committed only two years publishing and disseminating the most credible analysis ago to have an Audit Commission. There is no longer possible, and its having an advocacy role that might an Audit Commission, but the OBR seems the best result in its being brought into political debates. The alternative to be last thing we want to do is risk its impartiality and hence its credibility. The OBR will be a force for good “given a specific duty to report on whether the basis for allocation”— only if it is deemed credible, and the Treasury Committee of local government finance— agrees: is transparent” “The OBR’s contribution to public understanding should not in accordance with objective criteria set out. If the be confused with self promotion. This commentary function Government now no longer stand by that commitment, should be one of informing public debate through disseminating that is fair enough, but I would like to hear it from the better understanding of fiscal policy and long-term economic trends, identifying possible risks in the structure of the economy Minister. Where does she stand on that particular promise, and provision of data.” which was made before the election? The spirit of the amendment is already achieved through the OBR remit. Through producing the best Justine Greening: As the hon. Gentleman knows, the possible fiscal analysis, and doing so in a transparent local government finance settlement was debated in manner, the OBR will promote a wider public Parliament on 9 February. That is the appropriate vehicle understanding of sustainability issues. for Parliament to decide on matters. As for the way in On amendments 12 and 13, the OBR has been explicitly which local government funding is allocated and the established to examine a report on the sustainability of debate that he is interested in having on whether that the public finances, but, subject to that statutory duty, it happens on an impartial basis, many Members of is afforded complete discretion in doing so. To ensure Parliament would have their own opinion on whether that it is credible, it must operate objectively, transparently the settlement their council gets is fair and whether the and impartially. Both amendments seek to give the Government are treating their council impartially. OBR responsibility. Amendment 12 proposes doing so The hon. Gentleman will be pleased to hear that the in measuring child poverty, which would significantly local government resource review will be a fundamental and inappropriately expand its role. look at the future of local government finance. I am The OBR has an expertise in macro-economic and sure that he will want to have his say, and stakeholders fiscal analysis, not in examining the distributional effects will have the opportunity over the next few months to of Government policy. That would require a significant put their views on funding for local authorities from expansion of the OBR’s capability, which would not be 2013 to 2014. There will be a forum and a vehicle consistent with its responsibilities regarding the sustainability whereby impartiality can be considered. of the public finances. The amendment would bring the Just down the corridor, the Localism Bill is being OBR into a different analytical territory from the one discussed in Committee, too. Those on the Government that it is designed to consider. Benches have always been keen on localism and giving Amendment 13 would give the OBR a role in assessing local communities more control over what happens to local authority finance settlements. I wish to remind them. I hope that down the corridor the hon. Gentleman’s members of the Committee that the OBR is not a party is finally embracing the need to move away from policy-making organisation. Policy does—and, indeed, central diktat to more locally driven decision making. 55 Public Bill Committee1 MARCH 2011 Budget Responsibility and National 56 Audit Bill [Lords] With that, I have covered the issues raised by the is that the Government may well trigger the provisions Opposition Members. I do not accept their amendments. in the Bill that provide that fiscal circumstances mean Perhaps some were well intentioned, but they would that they cannot meet those targets as they pile on the take the OBR down a route that risks the fundamentals VAT, cut tax credits and education maintenance allowances of what it will be set up to achieve: impartiality, objectivity, and so on and so forth. This is the direction of policy transparency and making sure that people see it as that the Government are taking. Whatever those policy absolutely independent. objectives may be, let us have somebody independently assess their impact so that people do not have to take Chris Leslie: Dear, dear. The sound that you can hear, our word for it as politicians. We want to have someone Dr McCrea, is barrels being scraped as arguments else to do it. The whole construct of this arrangement is against the amendments are accrued as much as possible. in part about having an independent body audit the All credit to the officials that the hon. Lady has with her things that the Government want to be audited and today. It must have taken the phalanx hours of hard assessed, but anybody else’s opinion about what should work to come up with the argument that we cannot be audited or assessed, well that is outside the remit of assess the impact of Treasury policy on child poverty the Bill. because that would jeopardise the independence of the Office for Budget Responsibility. Anne Marie Morris: I question the hon. Gentleman’s The hon. Member for Putney is a talented Minister argument about logic. I do not agree with his summation who will go a long way in the years ahead, but that of the Minister’s logic, but I must question his logic. argument was not her finest hour. Perhaps she read on Just because we do not put a specific reference to child in her notes and got to the point where it said that the poverty in the Bill does not mean that the Government issue was outside the remit of the OBR and she tried to are not concerned it. Of course we are concerned about avoid saying it. But she did say it eventually. it. This is just the wrong place to do it and we would not The reason why she was logically trying to avoid do it justice. saying that child poverty would be outside the remit of the OBR was that it implies, at a certain level—I am Chris Leslie: In a way, the hon. Lady succinctly sure this is not true—that she does not regard child makes the argument that the Minister took about 20 minutes poverty as part of responsible budgeting and responsible to make. The Minister said that it would jeopardise the public financial stewardship. independence of the Office for Budget to have it looking It is a great pity if the hon. Lady takes that view. For at child poverty, whereas the hon. Lady has said that it all the points she makes that the OBR does not have the is the wrong measure and not the right organisation to expertise to look at these issues, I am not sure that that do that. The Minister eventually came round to saying is necessarily the case. It is a pretty broad-minded and that. If that is what they believe, that is the Minister’s well skilled organisation. As I said before, if we are to judgment. She takes a different definition of responsibility start looking at this concept of responsibility we have to than we would. We are looking at responsibility in start thinking about outcomes; otherwise we are merely terms of the things that matter to our constituents. If bean-counting and measuring inputs. I had thought she were to talk to the people out in her or my constituency that her Administration were against that sort of approach and ask them what a responsible budget is, they would in public policy management, but perhaps I am wrong. want to know what the impact is on the ground on the It would be perfectly reasonable to set out in the Bill lives, living standards and so on of real people. That is that the OBR should have this responsibility. That simply the point I am trying to make through this set of would in no way jeopardise its impartiality or independence. amendments. The fact that the Minister eventually had to resort to the arguments that it would risk the fundamentals of 5pm the OBR to do so and would be inappropriate for the OBR to have this duty is testament to the lower order On amendment 13, that barrel-scraping activity continued priority the Government are showing when it comes to again when the Minister was pressed on her party’s addressing child poverty issues. commitment to have an audit body that is given a specific duty to report on whether the basis for the local government financial settlement is “transparent Kerry McCarthy: Does my hon. Friend share my and in accordance with objective criteria set out by suspicion that the real reason why the Government do Ministers.” not want this provision to be included in the Bill is that, given their track record on the Budget and the spending Clearly, the Minister did not want to address that review and the impact of that on children and families, particular commitment. At no point did she say, “Yes, they have no intention of meeting the child poverty we stand by that commitment, but we are finding a targets and they want to brush under the carpet the fact different vehicle through which to adhere to it.” She did that this Child Poverty Act and these targets are in not say, “Actually, because of the coalition and the existence? Obviously if we had this provision in the Liberal Democrats, things are different. What we said Bill it would force them to do something about child before the election no longer counts.” That is sometimes poverty. what the Government say when they change their mind on various things. We therefore almost had a stealthy U-turn by conspicuous logic, rather than it being stated Chris Leslie: Indeed. Something like a year from the verbally. By ignoring the issue, she simply implied that it commencement of the Child Poverty Act, which is was no longer relevant. That is a great pity. We will around 25 March, a report must be produced on progress probably have to return to the matter at a later date in towards meeting the child poverty targets. Our suspicion the consideration of the Bill. 57 Public Bill CommitteeHOUSE OF COMMONS Budget Responsibility and National 58 Audit Bill [Lords] Thomas Docherty: Another reason might be that the Question negatived. Minister has spent too long with the Lib Dems and she Question proposed, That the clause stand part of the has forgotten what her job is. Bill.

Chris Leslie: I cannot imagine the way that Ministers work in this day and age. It is certainly a mystery to Chris Leslie: Clause 4 is one of the central provisions most of the country. I thought that the notion of trying in the Bill. We have already debated the limits of subsection to create a vehicle to assess local budget responsibility (1), but the clause also sets out the consequential reporting and the impartiality of the settlement would be something arrangements that the Office for Budget Responsibility we could engage with the Government on, given that must make in respect of its duties. We have discussed, to they had shown through their words and policy documents a certain extent, the fact that there are several occasions an interest in that. However, obviously, that is not the on which reports must be prepared on fiscal and economic case. As I say, we will have to find another opportunity forecasting. There is, however, the anomaly of having to look at those particular issues. twice-yearly reports on fiscal and economic forecasting and the fiscal mandate, but only on one occasion each The Minister says that a review of local government year would the Office for Budget Responsibility make resources is coming up and that there is a Localism Bill. “an assessment of the accuracy of fiscal and economic forecasts However, those are not the correct vehicles for assessing prepared by it”. the transparent and objective criteria used for a local government financial settlement, because they will not Does the Minister think that there is any problem with a be creating an independent body in statute, such as the corporate body such as the OBR assessing the accuracy Audit Commission or the Office for Budget Responsibility. of its own forecasts? In clause 4(4)(a), there is a provision She may well have a number of her cronies in mind that that, every year, a navel-gazing operation will take she wants to appoint to that resources review, but the place, and, presumably, a document will be published Localism Bill certainly does not touch on these issues. that says something in the order of, “Yes. We looked at Therefore, we await with interest to see the Government’s these figures and published our assessment of them, ability to address their promise made before the general and our assessment was good and accurate. By saying election. that, therefore, we comply with the provisions in the Bill.” The other amendments in this chain have a number of merits. I heard what the Minister said about several I do not want to give the impression that I am of them. My hon. Friends who spoke earlier made good somehow sceptical of the necessity of every line in the points about the necessity for a broader definition of Bill, but one sometimes gets a sense that it is slightly sustainability. When challenged, the Minister did not flabby legislation and that there are several provisions say at any point, “Well, the OBR mustn’t look at child that are padding the legislation out to make it look poverty or the local government settlement.” We have slightly grander and more important than it perhaps is. to hope that it will at some point regard those things as Asking an organisation formally to review its own work issues that matter. I hope that the fact we have debated annually seems slightly circuitous. Perhaps the Minister them in Committee will send a signal to the OBR that feels that that is an especially worthwhile exercise. It scrutiny of such issues would be very welcome. may be what, in modern management parlance, they call a 360° review. It is a horrible process for anyone in I am happy to withdraw amendments 8, 9, 10, and 11, management where everyone around them is asked how but we want to press amendments 12 and 13 to a vote. well they are doing, but maybe it is something that Question put, That the amendment be made. Ministers should do more frequently. But for the OBR this is its fate—the measure is now in the Bill. However, The Committee divided: Ayes 7, Noes 8. never let it be said by a Minister in this Committee that Division No. 1] we cannot have a measure in the Bill because it is extraneous, unnecessary or not part of the legislation. AYES There are plenty of examples in the Bill of measures Docherty, Thomas McCarthy, Kerry that go slightly beyond necessity. Gilmore, Sheila McGovern, Alison By and large, we feel that there is merit in creating a Jones, Graham body to provide this analysis and assessment. We also Leslie, Chris Morrice, Graeme (Livingston) feel that the duties of the OBR and the issues that it should take into account are fairly uncontroversial, NOES other than the unnecessarily narrow definition of Goodwill, Mr Robert Patel, Priti “sustainability” that Ministers seem to be imposing Greening, Justine Shelbrooke, Alec through the drafting of the Bill. As I say, however, by Morris, Anne Marie Smith, Julian and large we think that there are important provisions Nuttall, Mr David Truss, Elizabeth in the Bill and we understand where the Government are coming from on this issue. Question accordingly negatived. Amendment proposed: 13, in clause 4, page 2, line 20, at The Chair: I call the hon. Member for Dunfermline end insert and West Fife. ‘The Office shall also examine and report on the impartiality of the local government finance settlement as it is applied across local authorities in England.’.—(Chris Alison McGovern (Wirral South) (Lab) rose— Leslie.) Question put, That the amendment be made. Thomas Docherty: Ladies first. 59 Public Bill Committee1 MARCH 2011 Budget Responsibility and National 60 Audit Bill [Lords] Alison McGovern: My hon. Friend says, “Ladies first,” find it helpful if the Minister could explain how she but I would perhaps say, “Age before beauty.” interprets sustainability of the public finances and how I hope that the Minister can help me with a question she expects the OBR to do so. Our debates on clause 4 about sustainability. The clause is central to the Bill as it have actually been about the job that we expect the establishes that the OBR will OBR to do. Sustainability is not a concept that can be “examine and report on the sustainability of the public finances.” easily understood or defined straightforwardly. Will the Minister give us more information about how she expects First, for the record, I want to raise a problem with the the duty to be fulfilled? clause because “sustainability” is a highly contested term. Our debate on the amendments to the clause revealed the contestable nature of the idea of Thomas Docherty: First, I shall to pick up on the “sustainability” in relation to the public finances. Minister’s earlier question about regulation. As she will I will give an example to show the Committee why I recall, after Northern Rock collapsed in 2008, her own think this idea of “sustainability” might be problematic boss spoke in the City—I suspect it was at a fundraising and why we need to be clear about it. The financial bash, because the Tories held many of those. He said, services sector commissioned a number of academic “You want less regulation and we”—the Tories—“will reports prior to the 2008 financial crash that demonstrated deliver it.” Labour Members will not take a lecture on a that collaterised debt obligations and credit default light-touch regulatory approach from Conservative swaps promoted economic stability. Some academics in Members. various economic departments around the world found I agree with my hon. Friend about the wishy-washy, that those financial instruments were effectively promoting unclear and not very substantive approach on some of financial stability because of their dispersal of risk. Of the wording in the clause. There is, of course, a Lib course, we all know what happened. Dem in the Treasury team, so given the Minister’s precise mind, such a wishy-washy phrase that does not mean anything at all must have come from the pen of Justine Greening: Obviously the hon. Lady is aware the Chief Secretary to the Treasury rather than her. that the shadow Chancellor was City Minister when much of this failure of regulation took place. Does she The specific issue that I would like the Minister to think that he was one of the people who read those clarify is whether the OBR will have the funding and reports and was taken in by them? ability to carry out studies into the devolved Administrations throughout the United Kingdom. At the moment, Scottish Ministers—when they have not given away the powers— Alison McGovern: The shadow Chancellor has played have the ability to set business rates within Scotland and a great role in the economic history of this country to vary income tax at the basic rate by up to 3p in the from the mid-1990s and through the crash. I suppose pound. Those revenue-raising powers are significant, that the Minister is asking me to account for why the and Scotland receives a not inconsiderable block grant previous Government did not take regulatory action to from the UK Government. From next Monday, the disallow the financial instruments that I have just mentioned. Committee of the whole House will consider the Scotland The implication of her point is that when the shadow Bill, so I look forward hearing to the hon. Members for Chancellor was City Minister, he ought to have acted in Witham and for Bury North championing the causes of some regulatory manner to prevent those instruments further devolution and handing powers to the Scottish from being used. Knowing what we know now, we can Parliament then. We know that they fully support those all go back, pick over history and say, “Perhaps such a things and agree with their Prime Minister that the Minister should have regulated there,” or, “Perhaps Scottish Parliament is a great institution. Without wishing such an Opposition should not have called for light-touch to prejudge their excellent contributions on the issue of regulation,” as the Conservative party did. Throughout greater fiscal powers for Scotland, it is clear that, in my living memory, the Conservative party has been future, the Scottish Parliament will have greater revenue calling for light-touch regulation of the City of London, raising powers. It has been suggested that it might even and it did so all the way through its time in opposition. I raise up to 50% of its income stream from its own would happily discuss at length with the Minister the people through its powers. point at which she thinks the former City Minister should have regulated, and at what point she called in You, Dr McCrea, and your colleagues in Northern Parliament for that very regulation, but I fear that such Ireland have successfully articulated the concerns of the a discussion might test your patience, Dr McCrea. The people there about the current funding settlement. I am question is important, however, and I wish that we had aware of particular concerns about the Treasury’s failure more information. to guarantee the security of Northern Ireland under the ludicrously small settlement. It would be entirely appropriate for the OBR to investigate not only whether the 5.15 pm Administrations of Northern Ireland, Scotland and The point I am driving at is that our recent history Wales have the correct funding settlements to carry out shows that conflicting evidence has been produced, their duties, but whether they have sustainable funding with worthy academics saying that a particular instrument settlements—to use the wishy-washy term of the Chief or a certain approach to the economy promotes stability. Secretary to the Treasury. How will the OBR know how it is to fulfil its legal duty Will the OBR be able to carry out a thorough, “to examine and report on the sustainability of the public finances” independent investigation into the sustainability of the when that notion is so heavily contested? It will be very devolved Administrations? If so, to echo the point difficult to achieve that without reference to academics, made by my hon. Friend the Member for Wirral South, information, economic theorists and public finance experts. over what period does the Minister think that the I am sure that it will refer to those sources, but I would sustainability should be examined? Is it the period of a 61 Public Bill CommitteeHOUSE OF COMMONS Budget Responsibility and National 62 Audit Bill [Lords] [Thomas Docherty] Justine Greening: Indeed. We would expect the OBR to discuss such analysis with the devolved Administration strict 12-month settlement, over the three years of a concerned, but it would be free to carry it out. normal funding settlement, or over the lifetime of a UK Parliament? Thomas Docherty: I am grateful to the Minister for that clarification. Will she also tell us whether the time Justine Greening: Clause 4 sets out the main duty for over which the OBR measures sustainability will be a the OBR, so it is obviously a key clause. That main duty single year, the period of a three-year funding settlement, is to examine and report on the sustainability of the or the lifetime of a Parliament? public finances. I will respond to some of the points Justine Greening: As I said earlier, one reason why we made the hon. Member for Wirral South shortly, but did not want to accept the Opposition amendment to given the range of dimensions to sustainability, the make the forecasts cover a five-year period is that we OBR will be required to clarify its focus in each report want to see sustainability over the medium and longer and to set out how it has approached the question of term. In fact, the OBR has said that it wants to look sustainability. over a time period of 40 years, so one aspect of its work The Bill requires four specific pieces of analysis. is a long-term forward look at the sustainability of First, the OBR will have a duty to prepare fiscal and public finances. economic forecasts on at least two occasions for each As I have said, the OBR has complete discretion. financial year. Those are expected to act as the official That means that although the Government, parliamentary forecasts for the Budget and for the autumn. Handing Committees and any other body can ask it to carry out over the duty to produce those forecasts represents a a specific piece of work, it is for the OBR alone to major step forward for the credibility of the UK’s determine its wider work programme. economic and fiscal forecasts and policies. That has been recognised widely, from the CBI to the International On the OBR’s ability to look at sustainability and the Monetary Fund. That said, it is consistent with the use of experts, and its independence, which was raised Treasury Committee’s report that this and future by the hon. Member for Nottingham East, there will be Governments retain the right to disagree with the OBR’s non-executive directors as part of the broader OBR forecasts. If such a situation arose, the Chancellor would governance structure. On a day-to-day basis, they will provide reasons to Parliament. ensure its independence and provide a fresh input into how it is working, including on the relevance of its Secondly, alongside the forecasts, the OBR must produce forecasts. an assessment of the extent to which the fiscal mandate Although the Treasury previously did the forecasts has been, or is likely to be, achieved. It will make an that will now be carried out by the independent OBR, it independent assessment of the probability of the also used to assess whether its forecasts were accurate Government achieving their mandate, which will add and published a report on that once a year. We propose further credibility to the Government’s fiscal policy. to align that assessment of accuracy with what the OBR Thirdly, the OBR will, at least once for every financial will do, and given that both the forecasting and the year, prepare an assessment of the accuracy of the fiscal assessment of that forecasting used to be done by the and economic forecasts it prepared previously. The Treasury, we will put both in the OBR. purpose of that duty is to require the OBR to review its previous forecasts, which will allow it to consider any The review of the OBR will be strengthened on a possible forecasting errors within its models and judgments, day-to-day basis by non-executive directors and by the thus potentially strengthening its forecasting process. fact that the members of the Budget Responsibility Committee will be experts. Everybody in this House The fourth and final specific duty is to produce, at would agree that Robert Chote, as chair of the OBR least once for each financial year, an analysis of the and the Budget Responsibility Committee, is well respected sustainability of the public finances. We intend that that in the area. The OBR intends to establish an advisory analysis will promote wider understanding of medium committee of experts to support its work. Transparent and long-term fiscal pressures, both within the Government analysis and the publication of its assessment of the and more widely. For each report produced under the accuracy of its forecasting, which is part of what it clause, the OBR is required to explain the factors that it plans to do, is a key feedback loop to ensure that it took into account when preparing the report, including improves its forecasting over time. the main assumptions and risks. Finally, as I have said, the non-executive directors Beyond its statutory duties, the OBR will have complete will commission an entirely independent review of the discretion to determine its wider work programme. The independent OBR every five years. Those measures hon. Member for Dunfermline and West Fife asked mean that there are clear and effective safeguards in how the OBR will work with the devolved Administrations. place to ensure that the OBR’s forecasting is analysed It can work with them if there is a decision to analyse internally year on year and also externally. The ongoing any relevant issues that are consistent with the OBR’s scrutiny of OBR reports not only in Parliament, but by remit. For example, the hon. Gentleman mentioned the outside commentators, will also form part of the overall Scotland Bill, and once the Calman report is implemented, process of looking at how accurately the OBR is able to the OBR will be the forecasting authority for Scottish forecast. tax receipts, which I am sure he will be pleased to hear. The OBR can choose to do whatever work it wants, Chris Leslie: As I understand it, only three members subject to its statutory duty, so if it decided to analyse of the Office for Budget Responsibility are in place so the economy in Scotland or Wales— far, while two non-executives have not been appointed. Why have they not been appointed and when will they Thomas Docherty: Or Northern Ireland. be appointed? 63 Public Bill Committee1 MARCH 2011 Budget Responsibility and National 64 Audit Bill [Lords] Justine Greening: We are going through an appointment Justine Greening: We will be putting in place two. process for those non-executive directors, who of course Question put and agreed to. are just the initial non-executive directors. We have said that we think that there should be at least two. We Clause 4 accordingly ordered to stand part of the Bill. recognise that over time—Labour Members clearly have their own ideas—the Office for Budget Responsibility may feel that it needs more non-executive directors. The Clause 5 Bill gives the OBR the flexibility to recruit further non-executive directors. The advertisements for the positions HOW MAIN DUTY IS TO BE PERFORMED will go out later this year. We hope that people will be in post by the end of the year. At that stage, we will have a full Office for Budget Responsibility group on the Budget Kerry McCarthy: I beg to move amendment 15, in Responsibility Committee and in terms of non-executive clause 5, page 3, line 3, leave out ‘(2) and (3)’ and directors. insert ‘(2) to (4)’. 5.30 pm Thomas Docherty rose— The Chair: With this it will be convenient to discuss amendment 14, in clause 5, page 3, line 8, at end add— Justine Greening: I can see that the hon. Gentleman is ‘(4) The Office shall include in each of its publications full keen to jump in. details of contact with Treasury Ministers and Treasury officials since its most recent previous publication.’. Thomas Docherty: The Minister will obviously not have forgotten that there are 10 months of this year left, Kerry McCarthy: Amendment 14 is consequential so could she be a little more specific about what “later upon amendment 15, so we do not need to discuss it in this year” means? any detail. The amendments reiterate some of the points that my colleagues and I made earlier and that we will Justine Greening: At this point, we do not intend to address in substantially more detail when we consider take too long to put in place the initial non-executive how the office will be set up under schedule 1 and how it directors. I have tried to give an overall timeline that I will be run on a day-to-day basis. This is about whether am confident that we can meet, and I assure the hon. the relationship between the Office for Budget Responsibility Gentleman that we want to get the Office for Budget and the Treasury and Government will be truly independent Responsibility on a statutory footing, with all the people and about how we can ensure the greatest possible in place, as a matter of urgency. That is one reason why transparency in the office’s activities and accountability I rejected the amendment that would have created a for what it does and how it goes about doing it. In other delay, with a long-drawn-out public consultation that words, we are considering how the office can fulfil the would have pushed back the whole process. We are very requirement under subsection 2 that it must perform its keen to get on with this, and I understand that we duty under clause 4 “objectively, transparently and expect to have appointments in place by, in fact, the impartially”. I have already flagged up my concern summer. However, before we can advertise, we need to about the relationship between the Treasury and the agree the statutory role of the non-executive directors, OBR in comments on earlier amendments that were in Committee and then in the remaining stages of rejected by the Minister. scrutiny in the House. I can see that the hon. Gentleman The Minister has, as we would expect, said that there wants to intervene one more time. is nothing to worry about, that the Treasury has no problem with the OBR doing the job that it has been set Thomas Docherty: I do. I want to hoist the petard up to do and that if the OBR criticises or challenges the very gently. When the Minister says, “summer”, does Government, or even makes them look incompetent she mean by the summer recess? Will we have the and foolish—perish the thought—the Minister, her boss chance to have a statement from the Treasury before the the Chancellor and everyone in the Government from House rises on 19 July? The date might help the civil the Prime Minister down would be perfectly happy servants to work out whether that can be done. with the state of affairs and happy for the OBR to challenge, criticise and embarrass the Government in Justine Greening: I cannot at this stage give the that way and would never reach a stage where they precise date by which we will have the non-executive think that a spanner needs to be thrown into the OBR’s directors in place. We clearly want people whom we works. I am sure that the Minister will forgive those of think will be appropriate, and the Bill has to complete us in the Opposition who are perhaps a little more, not its parliamentary scrutiny, which is what we are all cynical, but sceptical about how the Government’s involved in today. At that stage, having created the roles undoubtedly good and honourable intentions will end statutorily and having advertised them, we will have to up working in the cold world of realpolitik. We therefore wait to see who applies. We clearly have to go through a seek to put some additional checks and balances into process, but I can assure the hon. Gentleman that that the Bill, and amendment 15 is one of them. process is under way and that we do not want any delay. We think that it would be proper and appropriate for the office to publish details of any contact that it has Chris Leslie: I apologise to the Minister, as I know with Treasury Ministers and officials. In the wider that she was finishing her speech on the clause, but I political context, there has been a lot of debate about would like to know how many non-executive posts will whether Members of Parliament should publish details be advertised before the summer. of all their meetings with lobby and campaign groups. 65 Public Bill CommitteeHOUSE OF COMMONS Budget Responsibility and National 66 Audit Bill [Lords] Justine Greening: Although the OBR will move into a The amendment is in line with the Government’s separate building, so it will not be anywhere in the objective to ensure that the OBR operates transparently. Treasury, Robert Chote and his team are still in the Clause 5(2) enshrines that and states: Treasury at the moment. To help me understand “The Office must perform that duty…transparently”. the proposal, if I were to pass Mr Chote in the corridor—he We agree that there needs to be some transparency on might be on his way to a meeting—and I said hello to contact with Ministers, special advisers and private him, and the hon. Lady wants us to publish full details officers. That is what the OBR will publish. In the of all contacts, is she saying that that contact should be run-up to the Budget, when the OBR is scrutinising the published by the OBR? That would be the meaning of impact of the Chancellor’s policy provisions, details of “all contact”. those meetings can be commercially sensitive if released and might harm the formulation of Department and Kerry McCarthy: Obviously, we are looking towards Government policy. the time when the OBR will be based in another building. Publishing all details would place the OBR under an The reason why it is important that it is based in unreasonable burden, but I can assure her that, like all another building is distance. We are also looking at public bodies, the OBR is required to operate under the other suggestions, such as the idea that staff from the Freedom of Information Act. Alongside that, it has the Treasury should not be seconded. The amendment would standard approach of looking at exemptions. When reinforce the idea of a certain formality in the relations the hon. Lady’s party was in office, practice was developed between the OBR and the Treasury. Obviously, it could on how to strike the balance between transparency for get into the realms of ridiculousness. If the Minister, as the public and the need for any Government to go she says, met Robert Chote by the water machine, said through a process of discussing policy without prejudicing hello and perhaps discussed what was on “EastEnders” that process. the night before, we would not expect that to be documented In November 2010, the OBR published a log of all and published, although I am sure that it would be substantive contacts with Ministers, special advisers fascinating to know what their conversation consisted and private office staff, during the forecasting process of. We are talking about formal contact and meetings to shortly after the economic and fiscal outlook. The issue get some idea of how much influence the Treasury seeks is therefore covered in the Bill, which is why I do not to exert. support the amendment, although I welcome the spirit As I was saying, people have floated proposals seeking in which it was tabled. I assure the hon. Lady that to get to the bottom of the influence of lobbyists, substantive contact will be published by the OBR, campaign groups and commercial organisations on MPs, although, because it is independent, it will be its decision saying that the details of all our meetings with such to do so. groups should be published. For example, if I were to meet the Child Poverty Action Group or one of the Kerry McCarthy: I thank the Minister for her response. organisations that has lobbied on child poverty, that On that basis, I beg to ask leave to withdraw the should be a matter of public record. Other people have amendment. countered that by saying that if the requirement was Amendment, by leave, withdrawn. that meetings on the parliamentary estate should be Clause 5 ordered to stand part of the Bill. made public, anyone seeking to hide something would simply meet off the parliamentary estate, or they would meet over a quiet drink in an informal setting. I appreciate Clause 6 that it is not the easiest thing in the world to record, but GUIDANCE AS TO HOW MAIN DUTY IS TO BE PERFORMED it is a starting point. The principle of a formal distance and the idea that Kerry McCarthy: I beg to move amendment 16, in there should be no informal or behind-the-scenes efforts clause 6, page 3, line 13, at end insert— to influence the OBR’s work are important. One could ‘(1A) Such guidance shall not prevent the Office from imagine a scenario where, if the relationship becomes preparing any forecasts, assessment or analysis at a time of its tenser, people from the Treasury might make phone choosing.’. calls to the OBR saying, “We aren’t happy with what Clause 6 deals with the issuing of guidance on how you are doing,” and try to bang people’s heads together. the main duty of the OBR will be performed. The main We want to avoid that situation, which is why we are duty is set out in clause 4, while the detail of how that suggesting that there should be a formal record of duty is to be performed is set out in clause 5. Clause 6 is contact. about the guidance that then informs how that duty is carried out. Our concern is that it sets out guidance that Justine Greening: The hon. Lady makes some valid may be included in the charter. I do not want to revisit points. She hit the nail on the head, when I asked her to all the territory that we have already discussed about be clear on exactly what contacts she envisaged as the fact that the charter is not before us in a finalised needing to be reported. Her amendment refers to publishing form today; but obviously, the fact that some guidance full details of all contact. It was helpful for her to clarify is contained in the charter, rather than in the Bill, gives that it referred to formal contact and meetings. No us less ability to scrutinise, amend and challenge it. doubt, she will welcome the fact that the OBR already publishes a log of substantive contact with Ministers, 5.45 pm special advisers and private offices during the forecasting We are concerned that the issuance of guidance contained process. In fact, that is its decision; it can publish in the charter would be used as a back-door way of information relating to its contact with Ministers and seeking to control or direct what the Office for Budget officials in the way that it wants. Responsibility does. On the one hand, the Minister 67 Public Bill Committee1 MARCH 2011 Budget Responsibility and National 68 Audit Bill [Lords] stressed the impartiality of the OBR and that it will be OBR fulfils its core executive function, which is to independent, deciding how it works, what it does and produce the official forecast, and to do so when Parliament how it performs its duties. That duty is set down in the and the public need to see it. Part of that is the OBR’s legislation, and there are details in clause 5 about how it analysis of the likelihood that the Government will will be performed. The detail of that guidance, however, meet their fiscal mandate. starts to sound prescriptive and as though the Treasury There is a need for the OBR to co-ordinate with the or the Government are keen to dot the i’s and cross the Treasury regarding the timing of that analysis, which t’s in terms of what the OBR does on a day-to-day basis. means that the OBR forecasts are the most relevant for We tabled the amendment to provide a safeguard. It the Chancellor’s policy decisions. However, that does states that the guidance that may be issued under the not undermine the OBR’s ability to act independently charter for budget responsibility of Ministers. How it approaches that forecast—its judgment “shall not prevent the Office from preparing any forecasts, assessment and methodology—remains at the complete discretion or analysis at a time of its choosing.”. of the OBR, and clause 6 makes that clear. Clause 6 is That is motivated by concern that the guidance, as also very clear that the charter cannot include guidance suggested in subsection (1), is on how the OBR should produce its forecasts. Apart from that, subject to fulfilling its own executive functions, “guidance to the Office about how it should perform its duty under section 4, including (in particular) guidance about the time the OBR can provide additional analysis to its own at which it is to prepare any forecast, assessment or analysis publication timetable, as stated in paragraph 4.21 on required to be prepared under subsection (3) or (4) of that page 14 of the charter for budget responsibility. section.”. Other than the example that I have just set out, the The Minister said that the OBR is perfectly capable of OBR can publish at a time of its choosing its assessment making its own decisions and deciding its own work of the accuracy of its fiscal and economic forecasts, load, and that it ought to be left to make those decisions. which it will do at least once a year. The analysis that it She made that point very strongly when she said that it will make of the sustainability of public forecasts will should not be our job to tell the office that it ought to be also be done at least once a year along with any other looking at local government finance, child poverty or analysis consistent with its duty to examine and report whatever. on the sustainability of the public finances. On the one hand, the Minister has said, “Leave the The charter for budget responsibility sets out that OBR alone; it knows what it is doing.” On the other relationship and the timing of the particular official hand, the Government now seem to want to tell the forecasts that the Chancellor and Parliament need. It office at what time it should prepare forecasts, assessments also sets out that the Chancellor will provide “reasonable or analysis. Surely, if the experts are in the office doing advance notice” ahead of any forecast publication date, the work on a day-to-day basis, and have already been so there is some co-ordination; it is set out in the charter told under clause 4 that they should prepare forecasts how that will work. twice a year and make an assessment of the accuracy of I hope those comments have provided some reassurance the forecast once a year, there is already a degree of about why that piece of the guidance and the charter prescription from the Government as to how often they works in the way they do. should do things. It seems to be going slightly too far in subsection (1) to state that further guidance should be issued about the timing of Kerry McCarthy: I am slightly confused as to why “any forecast, assessment or analysis”. there is a need for the provision in subsection (1). It That is why we feel that there should be a caveat, or a would seem a matter of common sense that if the safeguard provision, which says that if we accept that Chancellor has given the OBR reasonable notice of the Government are telling the office at what time it things that are likely to appear on the political calendar, should prepare forecasts, that should not preclude the which is a sensible way to conduct the relationship OBR exercising a degree of independence if it wants to between the organisations, the OBR—if it takes its role do anything else at other times of the year. That is just a seriously, as I am sure it will—will get to work and start caveat to the provision. I would not have thought that doing the analysis and assessments that are required. I the Government would have a problem including that am not sure what would be gained by additional guidance as a safeguard, but I look forward to hearing what the about the timing in the charter. I am not sure what sort Minister has to say. of wording would appear in the charter that would be useful, especially as if the charter is revised, it would have to be laid before Parliament. In such a case, there Justine Greening: I hope that I can clarify the situation would obviously be a significant time delay before anything for the hon. Lady. Clearly, we want to ensure that the in the guidance would become binding. guidance helps the OBR in clarifying its duty and how it will work in practice. It is also worth pointing out that when the Chancellor comes to produce the Budget, he Justine Greening: The hon. Lady advances one argument will rely on the OBR to produce the context for his that can be made. If we had not put in a safeguard to fiscal policy decisions. The OBR’s forecasts will, therefore, ensure that the OBR did not have to produce official be a very important part of the Budget, so it is important forecasts to coincide with core fiscal updates to Parliament that that aspect of what it does is produced in a co-ordinated by the Chancellor and to feed into that policy-making manner. Otherwise, we could end up with a Chancellor process with its independent assessment of the impact having to take decisions without independent analysis of policies on the financial situation and the long-term from the OBR. The public and Parliament could end up sustainability of public finances, I suspect that the with no forecast alongside the Budget that the Chancellor Opposition would quite rightly have wanted to table an presented to Parliament. We want to ensure that the amendment to say that we should have such a safeguard. 69 Public Bill CommitteeHOUSE OF COMMONS Budget Responsibility and National 70 Audit Bill [Lords] [Justine Greening] eminently sensible to consider the consequences of different levels of income tax rise. If the rise in income tax were When Sir Alan Budd, who was the interim chair of the to be offset by cutting VAT, various scenarios and OBR, was asked to provide advice on how the OBR combinations of rises in direct taxation and cuts in should work, he said: indirect taxation might be considered, or one might “As a minimum requirement, the permanent OBR will need to look at the alternative, namely whether there should be produce one Budget forecast each year to coincide with, and rises in indirect taxation and cuts in direct taxation. include all of, the Budget measures.” Given the vagueness of clause 5 on that issue, perhaps The hon. Lady is right. Arguably, we could have left the guidance that will be included in the charter under that provision out, but it would have been wrong. The clause 6 should give more guidance to the Office for role of the OBR is so important that we must take on Budget Responsibility on when it would be deemed to board comments from people such as Sir Alan Budd. be straying out of its territory and when it would be Our view was that, on that particular aspect, we should deemed to be fulfilling its duty. Perhaps the Minister be prescriptive, not just for the Treasury and the Chancellor can give us some reassurance on that point. to have the OBR feed into the process and then report on it, but for the transparency that we need for the OBR Thomas Docherty: I want to focus particularly on and its role in aiding robust scrutiny of the public subsection (4), on which we seek guidance as to the finances. I hope that has provided the hon. Lady with Minister’s thinking. I will provide some specific examples some reassurance. of concern that I hope she can help to deal with. We are concerned about the designation of 28 days, which on Kerry McCarthy: I have nothing further to add. I beg the face of it appears to be a perfectly reasonable period to ask leave to withdraw the amendment. of time; I do not object to the principle of four weeks’ Amendment, by leave, withdrawn. notice. However, the Minister will be aware that a series Question proposed, That the clause stand part of the of events over the next 12 months will eat up quite a lot Bill. of the House’s sitting time, and that Ministers may not always be available. I am not sure whether the Minister Kerry McCarthy: Will the Minister elaborate on the is one of the 200 MPs who has had an invitation to the form that the guidance on how the Office for Budget royal wedding. I certainly have not, and I am not sure Responsibility performs its duty, particularly in relation whether any other Opposition Members have. The hon. to clause 5, will take? That clause seems to be dealing Member for Bristol West shakes his head. with a similar issue—how the main duty is to be performed—and clause 6 deals with guidance as to how 6pm the main duties are to be performed. Presumably, the I was told yesterday that 200 MPs have received charter and the guidance that it contains will build on invitations. I do not know whether any of the royal the contents of clause 5. household’s Chamberlains or Comptrollers and Vice- We are particularly concerned about the role of the Chamberlains have been invited in one capacity or Office for Budget Responsibility. The Minister touched another, but obviously Ministers may be distracted in on that concern when she quoted the Treasury Committee’s the build-up to the wedding. The House will not be report, which stated that the Office for Budget Responsibility sitting. I understand that some hon. Members have should not be a policy-making body. It is important their own wedding plans. They are to be congratulated that it is not, but we need clarity about where the on that, but I do not know whether they will need dividing line is. In its duty under clause 4(3) it will similar preparations. prepare “fiscal and economic forecasts” and assess There will be a series of events. The Easter recess lasts “the extent to which the fiscal mandate has been, or is likely to be, for three or four weeks, and I am sure that Members achieved.” will be out and about in Bristol, Chippenham and In particular, the wording “is likely to be achieved” elsewhere, campaigning hard for their coalition colleagues. strays into the territory of expressing an opinion. That If the idea of having 28 days is to allow Ministers and opinion might be based on data and facts rather than Members pre-consultation with interested bodies, it is political ideology, but it would certainly lead the office reasonable to suggest that the Government may struggle into that sort of territory. If it produces critiques of to have genuine consultation. what the Government have done, a question arises as to Then there is the summer recess. I do not know what whether it will stray into political territory. plans the Minister has for a holiday, and whether she Will the Minister tell us whether the guidance will will be joining the Chancellor in Klosters or wherever deal with the question of what would be considered as they go. I am not sure what are the best ski resorts in the having regard to Government policies, as set out in height of summer. Perhaps the Minister will clarify the clause 5, and as not considering Chancellor’s thinking on that. Ministers and Members “what the effect of any alternative policies would be.”? may not be around to take meetings, and the Christmas Imagine that the Government proposed a rise in income and new year recess will eat up another two weeks or tax of 1p in the pound. The Office for Budget Responsibility more. would play a role in considering the impact that that I am genuinely concerned about the 28-day period. would have on the sustainability of the public finances. We have not tabled a specific amendment, because we In considering that, would the office be able to pass hoped that the Minister would clarify the matter. However, judgment on or assess the impact of a 2p rise in income she will appreciate that if we do not feel that we have tax, or of the impact of no rise? If one is looking at the received a robust response we reserve the right to table impact of a rise in income tax in the context of the an amendment, perhaps on Report. I hope that the sustainability of the public finances, it would seem Minister will give us clarity on that question. 71 Public Bill Committee1 MARCH 2011 Budget Responsibility and National 72 Audit Bill [Lords] I am a new Member and seek guidance from the it approached that analysis, the risks that it took into Minister as to the procedure for laying the charter account, and its assumptions and methodology. Its before Parliament under clause 1(6). Will she clarify assessment will set out whether the Government are on what the period for formal debate and consultation will track to meet their fiscal mandate—the fiscal objectives be? I cannot speculate on what the Chair of the Treasury that they set themselves—and there will be transparency Committee may wish to do, but if he felt that it would so that people can look at how the assessment was be useful to take evidence, would that be built in? What carried out and take a decision on whether it could be guarantees are there on the period of formal statutory improved, and its shortcomings. It is clearly more consultation? Does the Minister envisage it being done challenging for any forecasting organisation to do its through a statutory instrument, or in an order to be job in times of uncertainty than in times of incremental debated by the House? economic change. I would be grateful if the Minister would clarify both those issues: the 28 days, and the process for formal Thomas Docherty: I am conscious that the Minister is parliamentary scrutiny and debate of changes to the trying to wind up the debate. Could she clarify the charter. formal parliamentary process once the modified charter is laid before Parliament? Wouldit be a statutory instrument, or some other mechanism? Justine Greening: The charter for budget responsibility may include guidance to the Office for Budget Responsibility on how it should perform its duty, and the OBR is Justine Greening: We expect it to be handled like a required to act consistently with it. However, the guidance statutory instrument in terms of timing and scrutiny, must relate only to the functions conferred by the Bill. I but, ultimately, there will be a parliamentary procedure must make it clear that the guidance cannot add to or that the usual channels will go through to decide precisely distort the OBR’s remit as set out under the Bill, which how it will be handled. is a safeguard. Going back to my comments on whether the OBR As we heard earlier this afternoon, the charter can should look at different policies—this was raised by the include guidance on the timing of the forecast assessment hon. Member for Bristol East—we do not think that it and analysis required under subsections (3) and (4) of should be in the business of looking at alternative clause 4. The Chancellor will commission the OBR to policy scenarios. It should simply provide forecasts that produce its fiscal and economic forecasts on a particular are based on the policies that the Government are date, to ensure that the forecasts are produced in line pursuing and have announced in the Budget. If it starts with the Government’s timetable for the Budget and to stray into analysis of alternative policy scenarios, it autumn forecast; that requires considerable co-ordination inevitably risks undermining its independence, impartiality across Departments. Other work will be produced by and objectivity. the OBR, at times determined solely by the OBR, with release dates set out in advance to ensure transparency. Kerry McCarthy: I appreciate entirely what the Minister Equally, the charter must not provide guidance on is saying, which is why I raised the issue. It would be the methods that the OBR may use in producing its wrong if the OBR were to see its job as passing a verdict forecasts, assessments and analysis. That provision is on anything that might be kicking around in the political vital, because it ensures that the OBR has complete sphere as a possible move that the Government could discretion over the methods that it uses, and that the take. However, there is a difference between that and Budget Responsibility Committee has complete freedom using comparisons with other possible scenarios to pass to determine how best to produce its independent forecasts, judgment on what the Government are actually doing. assessments and analysis. That is why I used the example of the Government Finally, if the Treasury wished to modify the guidance looking at a 1p rise in income tax; it would be difficult to the OBR in the charter, a draft of the modified to assess the impact of that on the sustainability of guidance would need to be published at least 28 days public finances without the charts that are normally before the modified charter is laid before the House for produced in such circumstances and which have always consideration. That addresses one of the questions raised been produced by Robert Chote in his former role at the by the hon. Member for Dunfermline and West Fife. IFS, looking at how much would be raised by a 2p rise That 28-day timeline is consistent with the 28-day procedure and how much by a 3p rise. I want some assurance that for statutory instruments, and, as I just stressed, it is a the OBR’s remit could enable it to cast its net slightly minimum amount of time. There would be the potential broader than just looking at exactly what the Government to lay an instrument earlier if, as he pointed out, there have done and to make comparisons with other things were mitigating circumstances. Taking all those things that the Government might have considered when they together in the clause means that there should always be made their decision. time for appropriate parliamentary scrutiny of the charter. The hon. Member for Bristol East had concerns Justine Greening: To be clear, the Office for Budget about how the OBR will undertake its assessment of Responsibility will not do that. It will not look at whether the Government are meeting their fiscal mandate, alternative policy scenarios, because its role is to provide and how it will judge sustainability. It is for the OBR to an independent forecast of the economic and fiscal undertake such analysis, and it will assess the likelihood policy decisions of the Government, with the economic of the Government’s meeting the fiscal mandate that forecasts going out into time. they set out for themselves in the charter. Alongside The hon. Lady gave the example of the OBR forecasting that, part of the Bill and the guidance in the charter sets alternative scenarios for income tax. If it did that, it out that the OBR has to be very transparent about how would inevitably lead to a debate about whether a 73 Public Bill CommitteeHOUSE OF COMMONS Budget Responsibility and National 74 Audit Bill [Lords] [Justine Greening] 6.15 pm Thomas Docherty: I think that perhaps the Minister Government could go further and still have sustainable has misunderstood me. If that is the case, I apologise public finances in relation to income tax decisions. That deeply. The example that I was trying to give is of the would take the OBR into a sphere where it could be Government having considered a taxation policy and embroiled in a political debate about income tax policy, discounted it. Does she not think that if the Government which is absolutely not what we want for the OBR. We have discounted a policy, it is right for the OBR, when it want it to look at the policy decisions of the Government, measures the validity of the policy that the Government to model them, to give its assessment on forecasting for have adopted, to compare the two like for like? Is that the economy and public finances; and, alongside that, clear? to say whether it believes the Government are likely to meet the fiscal mandate and objective they set themselves in the light of the policy decisions taken and the expected Justine Greening: We come back to my original trajectory of the forecasts. comments. First, apart from performing core executive The hon. Lady suggests an alternative way for the functions of fiscal and economic forecasting, it is up to OBR to work but, if we went down that route, it would the OBR to decide what other forecasting to do and undermine the most important aspect of the OBR, how and when to publish it. My response is much the which is to have something that is independent and that same as it was to the hon. Member for Bristol East: I achieves that through being impartial, objective and think that it would be against the spirit of what we are transparent. trying to achieve in setting up the OBR to put alternative policy scenarios into a post-Budget analysis, because it would inevitably end in the OBR being pulled into a Thomas Docherty: The Minister is very generous in debate about what the right policy was. We do not think taking our genuine interventions. Let us go back to that that is the OBR’s role. It is right for Parliament to Treasury questions just before Christmas, when, as she debate different policies, as we did on tuition fees, but will recall, no fewer than five Conservative MPs that is the role for us as Members of Parliament elected independently asked what assessment she and her colleagues by our constituents. had made of the graduate tax. Mr Speaker let those It is important that the OBR not only is independent questions in because he said that obviously the Government but is seen to be independent. We need only witness must have considered the graduate tax and discounted how the Opposition reacted to what they felt was the it when they were deciding on the hike in tuition fees inappropriate timing of a publication. I reassure Members that the hon. Member for Chippenham tore up his that there was no Government involvement, but it shows pledge card and supported. how important and sensitive the issue is. That is one reason for the set-up of the clauses in the Bill and the Kerry McCarthy: And the hon. Member for Bristol charter supporting it, and it is why it is so important not West. just for the OBR to be independent but for it to be seen to be independent. We can already see that it will always be a concern, so we must put it beyond doubt. That is Thomas Docherty: I think that the hon. Gentleman what we are trying to do by saying that we do not think abstained. He kind of stuck to his principles and abstained. that the OBR should analyse alternative policy scenarios. Surely if the Government have made an assessment of With that, I support the clause. something and discounted it, it is reasonable that the Question put and agreed to. OBR would take a look at that policy area? I understand Clause 6 accordingly ordered to stand part of the Bill. what the Minister said about going off at a tangent and doing some blue-sky or original thinking, but if it is a policy, whether a graduate tax or an income tax rise, Clause 7 that the Government have admitted they have considered but discounted, does she not think the OBR should be able to look at that? EFFICIENCY ETC Question proposed, That the clause stand part of the Bill. Justine Greening: The hon. Gentleman makes an important point. The OBR plays a role of robustly and independently looking at the impact of policy decisions Chris Leslie: Given the general scepticism that some as they might affect the public finances and their hon. Members will have spotted in my previous comments, sustainability and the long-term forecasting of economic I do not wish to be a cynic about the Bill, but it is indicators. sometimes difficult to avoid when I look at how the Of course, the OBR like any other public body will be clauses are set out. If Members turn to page 3, they will subject to the Freedom of Information Act. Although see that clause 7, “Efficiency etc.”, contains a single clearly each case is different, the situation that he raises sentence: would be likely to fall under an exemption of policy in “The Office must aim to carry out its functions efficiently and development. In other words, it would simply be impossible cost-effectively.” to publish a blow-by-blow analysis of how the Budget That is clearly a crucial instruction for the Office for was being pulled together. It would not be in anybody’s Budget Responsibility. Of all public bodies, quangos interests for all that to be put into the public domain. and agencies, clearly it needs to be told on the face of However, the OBR is, of course, subject to the Freedom the Bill that it should conduct its functions efficiently of Information Act, like any other public body. and cost-effectively. 75 Public Bill Committee1 MARCH 2011 Budget Responsibility and National 76 Audit Bill [Lords] Why is the clause needed? Will the Minister elaborate point made earlier in relation to the Audit Commission, on whether it is a necessary piece of primary legislation? it must be recognised that there was a huge amount of Can she explain how such provisions would be enforced? waste in the commission. That is what the sentence In particular, I presume that the OBR will be subject to under discussion relates to. It is worth mentioning that audit. I think that the budget for its running costs is the way in which some bodies progress over time creates open to scrutiny by the National Audit Office, but I may large amounts of waste. be wrong so will she confirm whether that is right? How will we measure efficiency and cost-effectiveness in this Thomas Docherty: I am grateful to the hon. Gentleman, context? This is a new body that will be under intense because that leads me to a point that I will make in a scrutiny, and if it is anything less than frugal, or if it is moment. I shall first finish expanding on this point. The extravagant in any way with its office equipment, furniture, provision is a waste of paper and ink, and a prime real estate costs and so on, I am sure that members of example of rhetoric in Opposition not being shown in the public, the fourth estate and others will take an practice. This is the kind of nonsense civil service-speak interest. that we have come to expect from the Treasury over far too long a period. It should not be there. Duncan Hames (Chippenham) (LD): I am sure that they would, but I am not sure whether that would be The hon. Gentleman rightly raises the issue of how to sufficient. I am sure that the hon. Gentleman is, like me, measure waste. Although I would not fully agree with a great supporter of the establishment of the Independent his description that the Audit Commission had incurred Parliamentary Standards Authority, or IPSA, yet I suspect too high a level of waste, I do agree in respect of some that, in hindsight, we would have considered a clause of the things that the Audit Commission and others such as this to be beneficial to the Bill that established it. have done. Apart from the fact that it says it will “aim” rather than “will”, the clause does not give a single Chris Leslie: Mentioning that four-letter acronym is a measure or performance indicator or any standard by bit like mentioning the Scottish play. I could not agree which to judge whether the OBR will be carrying out its more. Indeed, I fear mentioning the authority’s very functions. existence on the record, so I will steer clear of it, not least because it probably would not be in order. Justine Greening: The hon. Gentleman just said that Will the Minister give us an estimate of the budget the clause should not be there. Can I take it from that that will be available to the OBR? It would be useful to that he is going to push it to a Division and vote know what it will cost the taxpayer. On the concept and against it? notion of the words “efficiently” and “cost-effectively”, the Bill is laden with a number of ill-defined adverbs—in fact, I sometimes wonder whether we should have an Thomas Docherty: I am hoping that when the Minister office for adverb definition. The Treasury might consider responds she will be able to articulate, as successfully as establishing that unit at some point. Such adverbs litter she has all day, exactly why the clause has been written. the legislation, yet there is no firm interpretation clause I am sure that she gave that more than 30 seconds’ to define them. I hope that the Minister can tell us why thought when she read over the Bill and when it was the OBR is necessary, how it will be enforced, measured being drawn up. I am confident, given her skills over the and audited, and how much it will cost. past nine months, that she will more than best me in my arguments. Up to that point, I would like to spout a bit Thomas Docherty: Sometimes I wonder whether Liberal more. Democrats have much say in the Treasury and on The hon. Member for Elmet and Rothwell was entirely economic policy. We often see the Parliamentary Private right to say that we should not have waste in Government. Secretary to the Chief Secretary sitting on the Liberal The clause fails to give a single measure by which it will Democrat Benches rather than behind his boss; he is judge the success or otherwise of the OBR. I am with never confident enough to be there for Treasury questions the hon. Member for Bury North that we should have or statements. However, when I see a statement such as better government and no meaningless regulation. that in clause 7, which means absolutely nothing to anybody and is complete waffle, I have confidence that Alison McGovern: Does my hon. Friend agree that Liberal Democrats have a real role in drawing up legislation. this is an important debate, given that we have just seen It is almost embarrassing for the House to have such a the so-called cull of the quangos? There is a real possibility phrase in a Bill. that that will end up costing the country more than I should declare that one of my wife’s relatives is a when we had those organisations operating. We all constituent of the hon. Member for Bury North, and want to get the OBR right. How does he feel the context she tells me that he is a real champion in Bury of less of the clause needs to be understood in terms of the regulation, of cutting back needless bureaucracy and of cost-effectiveness that we are trying to instil in the Bill? less Government waste on the printing of meaningless documents. If there was ever a statement in a document that was utter nonsense and tripe, it is that in clause 7. It Thomas Docherty: My hon. Friend is entirely right. is such waffle that it states not that it “will” carry out its On the cull of the quangos, it is interesting that the functions efficiently and cost-effectively, but that it will Secretary of State for Communities and Local Government “aim” to do so. eventually had to bow to some pressure. When the Minister is Chancellor—a position I am Alec Shelbrooke: We are all enjoying this part of the sure she will have before too long—or when, in four debate. We have been here for two and a half hours, and years and three months, there is a Labour Government, things have livened up at this late stage. To return to a or any future Government, they may dislike the OBR 77 Public Bill CommitteeHOUSE OF COMMONS Budget Responsibility and National 78 Audit Bill [Lords] [Thomas Docherty] We agree with that and think it is important enough for it to be in the Bill. and may, for quite logical, political reasons, decide to The budget for the Office for Budget Responsibility is scrap or change substantially its responsibilities. now set as part of the spending review. We have set a I gently suggest to the hon. Member for Elmet and budget for the whole of the spending review period, so Rothwell that the Secretary of State for Communities it will not be something that we come back to over the and Local Government has hidden—as far as the right course of that period. Part of that is about ensuring hon. Gentleman can hide—his hatred of any sort of that the OBR knows it is independent. The risk outlined quango behind a smokescreen of efficiency and he by the hon. Members for Nottingham East and for claims that the Audit Commission is not efficient. If Dunfermline and West Fife, that the OBR could be one does not spell out how to measure the efficiency of penalised for producing awkward reports and have its the OBR, it is vulnerable in future to a politically budget cut, has been tackled by giving the OBR a motivated Government saying that they want to get rid spending review settlement for the whole period. That of it because they do not like the reports that it produces. settlement provides an annual budget of £1.75 million The Minister has clearly given this sentence a great deal and Robert Chote, the chair of the OBR, agrees that of thought, and I look forward to her explaining what such a deal provides the OBR with adequate resources. she means by it. We are confident that the clause provides for the OBR to act in a way that is cost-effective and efficient. Justine Greening: I have to say that I did not think Furthermore, alongside the spending review settlement that clause 7 would be controversial. Perhaps comments it will have the budget over the course of this Parliament have proved that wrong. I think we are right to have to get on with the work that it needs to do. clause 7 in place because it requires the OBR to “aim to carry out its functions efficiently and cost-effectively.” Thomas Docherty: I am slightly concerned. If I have heard correctly, the Minister is suggesting that future Thomas Docherty: Will the Minister give way? Bills that set up a new body, from the Department of Health for example, will not contain that magical, wonderful sentence. Is she saying that the OBR and the NAO need 6.30 pm to behave in a cost-efficient manner and therefore that Justine Greening: Perhaps I can get to the end of my has been written down, but if other Departments do first sentence, the hon. Gentleman will find it helpful. not do that, the impression is that the Treasury does not To continue: and cost-effectiveness and efficiency should care much if the Department of Health does not run its be an important consideration for every public body. I bodies in a cost-efficient manner? Surely we should know he thought that was all waffle, but I assure him either have that sentence as a matter of course in every that, to us accountants, those words are important and Bill concerning public bodies, or not at all. mean an awful lot. I will say a little about the OBR’s budget and how we will ensure that it operates cost- efficiently and effectively. Justine Greening: Well, as the hon. Gentleman pointed out, we are in the business of getting rid of as many The Office for Budget Responsibility must have the ineffective public bodies as we can—he talked about maximum credibility in its operations. If the hon. what he called the quango cull. We are, of course, Gentleman looks at clause 21, he will see the same talking about a new body that has an important role to provision in relation to the National Audit Office. Hon. play. In the context of this new body—we do not aim to Members will be relieved to hear that ensuring that set one up every day of the week, which arguably is a organisations run in an efficient, cost-effective way is a change from the previous Government—we have inserted standard provision. this clause because, as he recognises, perhaps never more than now, it is incredibly important to ensure that Kerry McCarthy: The Minister pre-empts me—I was the Government is run in a cost-efficient and cost-effective flicking through the Bill to ensure that a similar clause way. As I said, the other reason the provision is in the was in the second section of the Bill about the National Bill is because a core aspect of how the OBR needs to Audit Office. Is that something we will find in every Bill work is its independence. The provision is the quid pro that sets up a new Government-related body? quo for the OBR having the level of discretion it has—in other words, complete discretion. Justine Greening: The reason it is important in this Bill is that clause 5, which we have just debated, sets out Mr David Nuttall (Bury North) (Con): I am sure that that the OBR has complete discretion over how it fulfils all hon. Members agree that every body should be its duty; in many respects, clause 7 is the quid pro quo efficient and cost-effective—there is no doubt about to that. The OBR has some independence and can that—but would the clause not be even more effective decide how to set about fulfilling its duties, but that and useful if it simply omitted the words “aim to”, so must be done in the context of working efficiently and that it stated that the office “must” carry out its functions cost-effectively. efficiently and cost-effectively? I worry that the wording The hon. Member for Nottingham East was right. might give the body a bit of wriggle room because it will The National Audit Office will be able to look at how be able to say, “Well, we aren’t very efficient, but we aim the Office for Budget Responsibility is working. The to be.” That is my worry. I am happy with the wording Treasury Committee stated that in this Bill, but in future perhaps the Minister could say, “the OBR should be subject to the same sort of NAO scrutiny as “Look, knock those words out. We’re telling you that any other part of Government.” you’ve got to be efficient, not just aim to be efficient.” 79 Public Bill Committee1 MARCH 2011 Budget Responsibility and National 80 Audit Bill [Lords] Justine Greening: My hon. Friend makes a powerful Bill with a schedule to create the OBR”, and he hit his point. I can assure him that the form of words we have fist on the table and insisted, “No”. As a matter of the used in no way lets organisations off the hook. In fact, virility of the Treasury, he needed at least 10 clauses to there is a legal reasonability test in the way it is phrased. get into double figures. We are passing a Bill that will become law, and the clause will ensure that the measure can work. However, Justine Greening: I have to pick the hon. Gentleman he is absolutely right that we have to demand value for up on his point about the Chancellor hitting his fist on money. He will be pleased to hear that one of the things the table. I think he is getting him mixed up with his we are doing in the Treasury is not just looking at the predecessor. Government’s policies in terms of value for money, but making sure that we have better tools in place to gather core financial data that will help us do that over the Chris Leslie: I am sure that my right hon. Friend the coming years. Member for Edinburgh South West (Mr Darling) would not have hit his fist on the table in such a way. I am surprised that the hon. Lady would characterise the Thomas Docherty: I saw the civil servants scribbling Chancellor’s predecessor in that way. I am not sure who like mad as they tried to dig themselves out of a hole. I she is thinking about. know that the Liberals are very fond of legal advice being published, but if the argument from the civil Perhaps one of the more pertinent points of the servants is that the words cannot be taken out—as the clause—if there is a pertinent point—relates to laying hon. Member for Bury North has reasonably suggested— the reports before Parliament. It is necessary to establish will the Minister publish for the Committee’s benefit the beyond doubt the independence of the OBR. We could specific legal advice that says if the words “aim to” are ensure that all parties have receipt of these reports, have taken out, the Bill would somehow be illegal? notice of them, an opportunity to read them simultaneously and that the Treasury does not receive a report ahead of Opposition parties. Clearly, there are many occasions Justine Greening: I do not think it is fair to say that when royal commissions and other inquiries will give we have had specific legal advice per se. As I pointed out their findings to Ministers many days in advance so that earlier, we are talking about a standard provision, which they can cogitate and assess their contents. They usually has gone not just into this part of the Bill, but other give Opposition parties an hour or half an hour’s notice parts. This is not a case of smoke and mirrors, as the before publishing a matter before Parliament. Will the hon. Gentleman seems to be suggesting. If he is interested Minister at least assure us that Ministers will receive in the concept of reasonableness in the context of the OBR reports at the same time as Opposition parties? law courts, I advise him that I am absolutely certain that That will mean beyond any shadow of a doubt that it is the House of Commons Library has entire books both a non-party, non-biased Office for Budget Responsibility. on how over the years the concept of reasonableness has become enshrined within the framework of our legal system, and on the value of giving some flexibility Thomas Docherty: I shall be relatively brief, because to enable a judgment to be made on what is reasonable, my hon. Friend has made many of the pertinent points based on the merits of a case. I am absolutely sure that that I wished to make. I was never a great student when if he leaves the Committee Room and heads down to I was at school. I suffered from bad habits. When I had the Library, he will be able to read all about reasonableness better things to do, such as playing football or computer and get a better understanding of the background to games in the evening, I would leave my homework to how the clause is phrased. the last minute. When I was in the playground before my homework was due, I went through the exercise of Question put and agreed to. trying to stuff out as far as possible my 500-word essay. Clause 7 accordingly ordered to stand part of the Bill. I must confess that I think the Chancellor—having gone to Klosters on his break, or perhaps he was on a yacht with Lord Mandelson and Mr Rothschild—did Clause 8 not give the Bill much thought. He sat at the back of the Cabinet room, and just before he was due to hand it in REPORTS to the civil servants, he came up with two or three Question proposed, That the clause stand part of the clauses to try to pad out what is a fairly sparse document. Bill. As the hon. Member for Bury North so ably articulated, less is sometimes better. In this case, it would have been Chris Leslie: Yet again, we step into a further dimension better. of poor drafting of the Bill. I can see why we would I am slightly surprised by the order in which the want the Office for Budget Responsibility to publish the distribution of reports is listed. If there had to be an reports, lay them before Parliament and send copies to order, I would have suggested “lay before Parliament″ the Treasury, but I am not convinced that a separate first. There is a good debate to be had about whether it clause in the Bill is necessary to make that happen. I feel should be the Treasury next or the public, but the key as though we should have a fourth point: it should be thing is that the provision to “lay it before Parliament” published in hard copy, perhaps on A4 paper, and should have been first. Further to the point made by my published in English; perhaps they should use an envelope hon. Friend the Member for Nottingham East, could and the appropriate postage to send it to the Treasury; the Minister explain why Parliament was not given and perhaps it could be posted in a timely fashion. sovereignty in terms of the order in which the OBR There is a point at which describing such process-ology should present its reports? Is it purely grammatical and in the Bill gives me cause to suspect that at some point stylistic to make it flow downwards and look better or the Chancellor was told, “Maybe this is a one or two-clause was there some reasoning behind it? 81 Public Bill CommitteeHOUSE OF COMMONS Budget Responsibility and National 82 Audit Bill [Lords] 6.45 pm On the point about timing, for the autumn forecast, the OBR shared its final report with the Treasury in line Justine Greening: I do not think I follow the hon. with how the Office for National Statistics would generally Gentleman’s argument. Clearly the first thing the office operate in terms of pre-release access. So the Treasury has to do under clause 8(2) is to publish the report. It is got 24 hours’ notice but that is no different from the hard to lay something before Parliament that has not way public statistics are often put into the public domain. yet been published. Hopefully the hon. Gentleman It is entirely consistent with that overall approach, welcomes the fact that after that it would be laid before which I hope will provide some reassurance that there is Parliament. no special arrangement for this report over other reports that people like the ONS would release. Stephen Williams (Bristol West) (LD): Will the Minister give way? Chris Leslie: I understand the relationship in terms of market sensitivity for statistical releases and so on, and Thomas Docherty: It is my speech and I will give way the need for policy makers to be able to have some in a moment. I am baffled. I sat in this room less than a advance notice, but that argument does not apply to the month ago when we debated the military covenant Office for Budget Responsibility, whose whole core and report, which obviously was about a report being published. being is its independence. Can the Minister see that It did not have a subsection (a) which stated that the from the Opposition perspective, which she will probably report must be published. Surely it is a given. It is an have in the full career ahead of her, it might be good example of bad drafting and civil servants doing their practice when Parliament receives such documents for homework at lunchtime just before the afternoon lesson. Opposition parties, and even Liberal Democrat spokesmen It is a badly drafted document. It is not necessary to when relevant, to receive them simultaneously with write “publish the report” if that was the intention. Ministers. There is no justification for not doing that, is there? Stephen Williams: I am sorry about my mistake, Dr McCrea. The hon. Gentleman bobbed up and down Justine Greening: I do not think there is any reason to so often that I had forgotten whether he was making an depart from the normal way in which public statistics intervention or a speech. He is making a good point. are released. The hon. Gentleman was a Minister during Would he be reassured if the intention behind this was the halcyon years when the economy was bubbling away that the document would be published but would be and building up the structural deficit that we are having laid before Parliament before being disclosed to anyone to sort out. There is no reason, having set up the OBR, else, such as the press, which the last Government did to depart from a standard reporting procedure of the frequently? ONS. As ever, Government policy must react to OBR forecasts, so our approach is only right.

Thomas Docherty: I welcome the hon. Gentleman to the debate. He is entirely right. I am seeking to protect Thomas Docherty: I draw the Minister’s attention to the sovereignty of Parliament by ensuring that copies the rather sheepish-looking hon. Member for Bristol are not doled out to the Press Gallery but are laid in the West who, only four or five minutes ago, was under the House of Commons prior to being released anywhere clear impression that Parliament would receive the else. Bizarrely, given the structure of the clause, making information before the Treasury. Even the Minister’s it available publicly does not seem to have made it into loyal supporters believe that her position is not the right the list of actions that the Government make. If we are one. Will she not reflect on the fact that the OBR is very to have this totally spurious clause, I hope that the different from the ONS. There are no market statistics, Minister can give me a guarantee that the reports will be and this is another example of her civil servants not made more publicly available. I agree with my hon. having done their homework before turning up here Friend the Member for Nottingham East that we should today. Will she reflect carefully on this important issue not get into whether it is on the internet, in hard copies of parliamentary sovereignty? and available from HMSO or wherever else. Will the Minister give an undertaking that there will be a publicly Julian Smith (Skipton and Ripon) (Con): Will the available version of the reports? hon. Gentleman give way?

Justine Greening: Hon. Members will know that this Thomas Docherty: I cannot give way to the hon. clause ensures that the OBR publishes each of the Gentleman. reports required under clause 4 and publication will allow every interested party to access the forecasts, Alec Shelbrooke: On a point of order, Dr McCrea. analyses and assessments of the OBR. That is the key Will you advise whether it is in order for civil servants to element of the OBR’s transparency. As we have just be constantly criticised when they have no right of heard, it is clearly set out in clause 8 that the OBR must reply. lay its report before Parliament, not the Treasury. In fact the Treasury will be sent a copy of the report. That is a further example of how we have tried to strike the The Chair: I think we will just continue the debate. I right balance by making sure that although the OBR remember sitting in other debates when hon. Members produces official forecasts that the Treasury uses, it is were in different seats, and civil servants, although they nevertheless independent of the Treasury and that is had no right of reply, had to listen to comments being why a copy of those reports will be sent to the Treasury. made about them. 83 Public Bill Committee1 MARCH 2011 Budget Responsibility and National 84 Audit Bill [Lords] Justine Greening: I can be clear. This is a Bill that, that way. That is why we believe that it is sensible for the having been through the other place, Ministers are now OBR also to approach its new role in that way. I taking through the House of Commons. I think the appreciate that some hon. Members may not agree, but comments about officials are slightly superfluous in we must agree to disagree. that context. Question put and agreed to. I simply do not agree with the points made by Opposition Clause 8 accordingly ordered to stand part of the Bill. Members. There is a long-standing process for releasing Ordered, That further consideration be now adjourned. a range of sensitive and public material into the public —(Mr Goodwill.) domain. In many respects it has served this country well in enabling Governments to give a response when statistics come into the public domain, and I think that is why the 6.54 pm Office for National Statistics has approached its role in Adjourned till Thursday 3 March at Nine o’clock.