Budget Responsibility and National Audit Bill [HL]

My Lords, we could add an awful lot of not directly relevant things into the charter and make a document of biblical proportions that discusses all sorts of things. The charter, unlike the previous Government’s code, explicitly sets out the Government’s fiscal policy objectives, so we have moved on. However, there is no point in moving on to all sorts of things that do not need to be in there, which is what the noble Lord, Lord Myners, suggests. Yes, we have moved on. The charter explicitly includes the Government’s means to achieve the fiscal objectives and the fiscal mandate. The coalition’s programme for government made it clear that accelerating the reduction of the deficit to ensure recovery was the greatest challenge. That all links through to the policy actions that we have taken. Through the creation of the independent Office for Budget Responsibility, credibility has been restored to the forecasts on which fiscal policy is based. I think that it is that that we all broadly welcomed at Second Reading and we must not lose sight of ensuring that the linkage between the Bill and the charter is focused on that single, critical objective. The charter is a fiscal policy document, which helps to deliver the Government’s economic policy. To deliver the economic policy objective, the Government employ a wide range of macroeconomic and microeconomic policy tools and frameworks and, for those reasons, I believe that the amendments are not appropriate. The charter is not the Government’s economic policy framework but a document to underpin the work of the OBR, and that is all that it is proper to be. On that basis, I hope that noble Lords will withdraw the amendment and not press Amendments 2 and 3. Amendment 4 is similar in nature to the other three amendments in that it concerns the fiscal mandate, which is the means for achieving the fiscal objectives. It is the Government’s quantified and specific target or fiscal rule, which will help to steer fiscal policy over the medium term. In setting a specific target, the mandate steers policy towards achieving the more general and strategic objectives that the Government have set for fiscal policy. The amendment suggests that the fiscal mandate is the key means of achieving the Government’s economic objectives. That is not the case. The ambitious and appropriate fiscal mandate that the Chancellor has set is crucial to delivering our fiscal objectives as a Government, but a much wider suite of economic policy, as I have explained, contributes to the Government’s economic objectives. As I mentioned, the monetary policy framework, financial stability policy and microeconomic policy all contribute to the Government’s economic objectives. It is correct that the Government create an economic policy environment where all policy frameworks and tools contribute to their economic policy objective, yet the fiscal mandate should remain a fiscal target in a statutory fiscal charter and we should not stray from that. There are a couple of other points that it is perhaps worth touching on before I conclude. On sustainability, the OBR will bring forward a sustainability analysis next summer, which will include, "““long-term projections for the public finances and an assessment of the public sector balance sheet””." My noble friend Lord Higgins raised a question on that. It is referred to in paragraph 4.15 of the charter, so sustainability and the question of a balance sheet are absolutely in the work programme. Having explained the whole context for the charter within the overall fiscal framework, I hope that noble Lords will see fit not to press the amendments.