Budget Responsibility and National Audit Bill [HL]

My Lords, when I prepared my speaking note for a discussion of this series of amendments to Clause 5(3), I wrote the following: ““The intention behind Clause 5(3) is clear and sensible””. I now realise how enormously wrong I was in that observation, because, following our discussion last week, to which the noble Lord, Lord Higgins, has just referred, it is apparent that Clause 5(3) is neither clear nor sensible. These amendments give us at least an opportunity to talk around the issues and provide some material for the Government to help them to bring forward—as I hope and am confident they will—their own amendment to Clause 5(3). Amendment 31 was prepared when I thought I knew what the clause meant: that the OBR should focus on developing a successful forecasting methodology and applying it to the evaluation of government programmes alone, keeping out of the arena of political controversy. The noble Lord quoted me on that just now and I stand by my belief that it should be the case. Even on these grounds, the clause is not well drafted. As I pointed out at Second Reading, it might be possible to conceive of opposition policies that do not impinge on government policies. My example was of an employment programme for which funding had been secured from the European Union so that there was no impact on the Government’s fiscal stance. Such a programme would not be an alternative but an addition to anything that the Government themselves were doing. Therefore, there is a degree of ambiguity as the clause stands. My Amendment 31 seeks to eliminate this ambiguity by stating explicitly that in so far as OBR reports include an assessment of the impact of policies, reference should be made to government policies alone. I believe that my redraft of Clause 5(3) unwittingly achieves with far greater clarity what we now know the Government were hoping to do with their subsection, which is rather messy—indeed, hopeless—at the moment. It embodies the positive statement that government policies should be taken into account, which is what we were told it was supposed to do last time, and ensures by the use of ““only”” that policies emanating from elsewhere will not be part of the appraisal or forecasting activities. I think that I have actually cracked the Government’s problem for them. It will be evident from what I have said that I disagree with the goals of the amendments moved by the noble Lord, Lord Higgins, which would take this out altogether, or tabled by my noble friends Lord Barnett and Lord Peston. I say that the OBR should focus on the Government alone and that it would be unfortunate if it were turned into a sort of policy referee. It might be possible if economic forecasting was a precise science, but it is not and there will always be a certain amount of judgment involved. It is not like a measuring rod with which you can say whether something is accurate. That is not what economic forecasting is about. At an appropriate time, I will move Amendment 31. I believe that the Government will bring forward something like this to solve the problems that we have identified in this part of the Bill.