Budget Responsibility and National Audit Bill [HL]

My Lords, I regard the question of sustainability as very important, so much so that although I will give a brief definition, because I have been asked what the Government mean by it, the critical issue for the OBR is concerned is that it should have an unfettered ability to look at sustainability in its broadest sense. I see that the noble Lord, Lord Peston, is nodding in agreement. The main objective here is not to constrain the OBR by giving it some sort of government laid-down definition of sustainability—there is more nodding, for which I am grateful—so while I can give my own overview definition of sustainability, that rather misses the point. Sustainability is part of the Treasury’s overall fiscal policy objectives, and to the Government, the sustainability of the public finances means putting them on a footing from which they can withstand shocks. It means keeping the deficit down so that debt does not spiral out of control. That is the fundamental of it, and it is the Treasury’s responsibility to make policy that supports sustainable public finances. That would be my overview of where we start. The important point is that the OBR should take this matter away. It seems to have indicated that this is not an easy thing to do, and has already made that clear in its remarks both in the Pre-Budget forecast earlier this year and in the November document, the Economic and fiscal outlook. The OBR talks about what it has done, and critically it says that it will examine the issue of sustainability in detail in the fiscal sustainability report due next summer. That is at paragraph 5.25 on page 140 of the latest document. There is a section on sustainability and, indeed, a chapter on fiscal sustainability, including, on page 55 of the pre-Budget forecast document, lots of complicated equations that are beyond my grasp of economics. The OBR is already, quite rightly, beginning to analyse this. It recognises that a lot more analysis is to be done, including looking at the implications of a number of relevant government policy areas and reviews. It has set all that out. The critical thing here is that we make sure that the OBR is allowed to do that unfettered. I would not necessarily want to constrain the OBR in the way suggested by Amendment 27. I am sympathetic to the principle, because I think that it absolutely has to explain the context of any work that it does on sustainability.