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Fiscal Responsibility Bill

My Lords, I try never to talk about the stability and growth pact and I shall not do so today. I was explaining the fundamental weakness of the Bill—namely, that it pretends that to legislate for duties is to make them happen. It ranks alongside the Climate Change Act and the Child Poverty Bill in diverting attention from underlying failure by seeking to bind a later Government to deliver what this Government's own policies have failed to do. We agree with the direction of travel of the duties set out in Clause 1; achieving a reduction in borrowing and net debt would be a step in the right direction. As we have debated on other occasions, however, our policies would have greater ambition in clearing up the economic morass in which we now find ourselves. However, we do not need an Act to make this a duty, we need government action. Words in this Bill are not a substitute for action. The PBR, as we debated last week in the context of the Maastricht Motion, conceals beneath its surface a need to reduce spending by anything up to 24 per cent in some departments. But the Comprehensive Spending Review is on hold and the Prime Minster refuses to talk about expenditure cuts. Clause 2 reaches the height of absurdity because it requires the Treasury to tell the Treasury to do things to secure sound public finances. Why do we need a statute to do that? Will the Treasury no longer do its job unless the law tells it to? It is sheer, arrant nonsense. Clause 3 requires the Treasury to report on progress, but what substance does it add? It effectively requires the Pre-Budget Report and the Budget Report to show borrowing and debt figures. Have we never seen borrowing and debt figures in those reports? Of course we have. Have those reports ever given an honest explanation of why the Treasury’s forecasts for borrowing and debt have been miles out? Of course they have not. Will this clause make any difference? I leave noble Lords to draw their own conclusion. Clause 4 blows the whole Bill apart. We have these duties and reports, but there is absolutely no legal consequence for anybody or any organisation if they are missed. What on earth is the point of legislating if there are no consequences and the only outcome is reports which we already get? As there is no commencement clause, the legislation will come into effect as soon as Royal Assent is received. The clever clogs in Number 10 Downing Street and the schools department will congratulate themselves that they have solved the financial problems of the country. But of course the Bill will make no difference at all. The most compelling bit of evidence for that is the impact assessment, which states: "““There are no monetisable benefits arising from the Bill””." That, at least, is an honest statement, because the Bill will make not one jot of difference to the real world. Either the Government will get a grip of the public finances or they will not. We rather think that the current Government will not do so in a month of Sundays, and that we will have to wait until the other side of the election for a new Government who will have to act. This is a Bill of such stupidity that it is an insult to Parliament to use its time to process it. But the bigger insult to Parliament comes from the process which the Government have used to force the Bill onto the statute book. The Bill has come to your Lordships’ House certified as a money Bill by the Speaker. We therefore cannot amend it. Sorely though we may be tempted, our House cannot challenge the Speaker’s certificate, and I do not do so. Once issued, the Speaker’s certificate is accepted without question, and this of course stifles consideration in your Lordships’ House. It is perhaps for another day, in the context of wider parliamentary reform, to look at whether this convention continues to serve the public interest. The bigger problem with the Bill is that the Government, through the deliberate use of their majority in the other place, have used the procedures of the other place to ensure that the Bill was not properly considered. The other place has the exclusive right, which we fully respect, to take decisions on its own business. However, as my amendment to the Motion suggests, wider parliamentary considerations arise when the other place decides not to examine a Bill in detail and the Speaker’s certificate means that matters which will become the law of the land are not scrutinised by Parliament. What is Parliament for if not to scrutinise proposals tabled by the Executive? I submit, as my amendment to the Motion sets out, that it is part of the proper conduct of constitutional government for at least one House of Parliament to examine proposed legislation in detail before it becomes law. I do not believe that certification as a money Bill should alter that principle. I remind the House what happened in this case. After the Bill’s Second Reading in the other place, it had its Committee stage on the Floor of the House. This enabled the Government to avoid the evidence phase that is now a feature of the Public Bill Committee procedure in the other place. It does not take a genius to work out that evidence sessions would have exposed the Bill as completely lacking in intellectual support or hard evidence. The Government allowed only one day of consideration in Committee. The other place was able to consider amendments only to Clause 1: Clauses 2 to 6 were untouched. The debates on the amendments to Clause 1 revealed significant deficiencies. Clause 1 fails to mention the structural deficit; does not cope with a double-dip recession and lacks independent scrutiny such as we have proposed with an office of budget responsibility. Of course, the Government used their majority to make sure that these sensible amendments were defeated. The Government allowed no time for reflection, and no Report stage. The Bill went immediately to Third Reading and arrived here the next day. Why did the Government do that? It was one way to close down debate on the Bill. Put simply, the Government used their parliamentary muscle to squash dissent. One other Bill has recently been treated in this way in the other place: the Personal Care at Home Bill. Fortunately, that Bill did not attract the Speaker’s certificate, and I am sure that it will be dealt with in your Lordships’ House in the way that it deserves. However, we cannot do anything to the Fiscal Responsibility Bill because it is a money Bill. It will go onto the statute book unamended soon after our proceedings today. The least that it deserves is to be amended, to have emptiness replaced with substance. The most that we can do is to hold it up for a couple of weeks. We cannot amend the Bill, but we can amend the Motion approving its Second Reading. I hope that the House will agree that a Bill that has not been fully scrutinised in either House of Parliament offends against the proper conduct of constitutional government, and that we regret that the Bill will pass into law without full scrutiny. I beg to move.