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Fiscal Responsibility Bill

My Lords, I hope to make a short speech, because the Bill deserves short shrift. I add my voice to the many criticisms of the Bill and support all that my noble friend Lady Noakes on the Front Bench and my noble friend Lord Lawson, with whom I had the privilege to serve as Chief Secretary in the mid-80s, have said about it. There are so many criticisms of and clear flaws in the Bill. Most obviously, anyone can set targets, but without plans to reach them and without sanctions for breaching or failing to achieve them, the exercise, and hence the Bill, is meaningless. The Explanatory Notes state: "““The purpose of the Bill is to ensure that there is always in place a duty on the Treasury to secure sound public finances for the United Kingdom””." We do not need a Bill to do that. I had always thought that every Chancellor and Chief Secretary had that high on their list of responsibilities and priorities. Is the Minister really saying that, up to now, no Chancellor, no Chief Secretary and no Treasury has ever regarded that as one of their duties? The more I read the Bill, the more it seems to me that it adds nothing to what any good Chancellor and any proper Treasury would do anyway. It adds nothing, especially as it has let-out clauses in its later part, which were not even looked at in the other place. As for accountability to Parliament, surely that has always been the case. I challenge the Minister to tell us that, hitherto, the Government have regarded themselves as not being accountable to Parliament in numerous ways and through numerous mechanisms. The Bill adds nothing in that respect either. The way in which the Government railroaded the Bill through the House of Commons does not augur well for any parliamentary scrutiny arising from the Bill. It is a waste of parliamentary time. The targets are worth little if there are so many let-outs and no penalties. They are no substitute for real, costed plans and real action. They are based on the fantasy that wishing makes it so. This morning, the Minister talked about Clause 1 with a straight face when he described the targets as though, thanks to the Bill, they would just happen. As Richard Lambert, director-general of the CBI, said, "““it’s a bit like me saying I’m going to join the gym and that means I’m fit already””." What does the Bill do that a Budget and the public expenditure review are not doing or should be doing already? It is meaningless. After the election, no one will pay any attention to the Bill; it is real decisions and real measures that will count. Indeed, no one is paying any attention to the Bill now. Is it an attempt to convince markets, domestic and international? If so, it has failed, as is demonstrated by the current turmoil in international currency and bond markets and by the fact that it has been totally ignored by all the bankers, economists, financiers, speculators and commentators. Has anyone said, ““It’s all right, we have the Fiscal Responsibility Bill, and that will see us through””? No one has said that. In conclusion, I made two comparisons. The first is with the fiscal rules, which were drawn up on the back of an envelope and trumpeted as part of fiscal discipline. In the period of prudence, until about 2000, when the then Chancellor was observing and constantly talking about prudence, the fiscal rules were observed. Increasingly, as public expenditure increased, the rules had to be stretched and fiddled—changing the date line and so on. They were increasingly broken and discredited and, finally, ignored, dropped and forgotten. This Government ended up with a massive fiscal deficit, leaving this country one of the least prepared to face the global credit crunch. The Bill, with all its let-outs, including Clause 4(3), could easily go the same way as the fiscal rules if this Government had to implement it. The second comparison is with other recent actions dreamt up by the Prime Minister. After 13 years of opposing it, the Prime Minister has proposed a referendum on an alternative vote system—after the election, of course—in a blatant bribe to the Liberal Democrats. The Personal Care at Home Bill, described by one of the presenters on the ““Today”” programme this morning as a back-of-the-envelope piece of electioneering, has been devastatingly holed under the water by 79 local authorities in a letter to the Times today. In my view, it was shredded at Second Reading by the noble Lords, Lord Warner and Lord Lipsey, and, in particular, by my noble friend Lord Howe, speaking from our Front Bench. My local newspaper, the Eastern Daily Press, said that, given the realities of the country’s finances, it could seem a promise plucked straight from cloud-cuckoo-land. This Bill follows the same process. The Prime Minister’s frenetic activity and headline electioneering are no substitute for thoughtful policy and practical actions. The Bill is in the same vein, giving the pretence, rather than the practical reality, of tough action on the fiscal deficit. In my 36 years in Parliament, I cannot recall an example of an affront to Parliament and an abuse of legislative process such as this Bill. I have a great deal of respect for the Minister who introduced the Bill. After a shaky start—I make no criticism of that, because it is quite a translation to come from the City to Parliament—he has demonstrated in all the things that he has been responsible for that his experience, expertise and authority count. Today, however, he had to have a straight face as he read out the nonsense that was put in front of him. If I were a Treasury Minister now, I would vigorously oppose the Bill within the Treasury and, if I had to put it forward, I would have my head down and my hands over my ears; I would read go rapidly as possible through the stuff that I was supposed to read out and hope that no one would follow me afterwards. There was something of that sort from the Minister today. He gabbled through. I suspect that he knows that he was talking gobbledegook without substance. In short, we should not be wasting our time with a Bill such as this.