Fiscal Responsibility Bill

I agree with my hon. Friend. I, too, want to reduce borrowing. We have to do more than moderate it—it has to come down. He is right also that part of what we must first do is close the tax gap and ensure that HMRC does everything possible to ensure that it collects every penny due to it. That is not always possible—people go bankrupt and so on—but we must do that. It is also necessary for us to be vigilant about closing tax loopholes when they emerge. One of the successes of the G20 meeting last year was at long last to get international agreement to begin to open the doors on some of the tax havens, such as Lichtenstein for example, so that we can get access to the records of people who live and do business in this country but avoid paying tax here. That is grossly unfair and inefficient. I agree with him on that. We have a duty to support the economy during the downturn, and that has resulted in higher borrowing, and indeed such measures are still supporting the economy. Not to have put in place the discretionary measures that we have introduced since the end of 2007 would have had disastrous consequences for the economy—I accept that is a minority view, although held by those on one side of the House—because failure to support the economy would have meant higher, not lower, debt and higher, not lower, long-term borrowing. I have always made it clear that support for the economy during the downturn goes hand in hand with steps to rebuild our fiscal strength once recovery is established. That is necessary to get the growth that we need. However, it is also imperative that we get our borrowing down in a way that supports growth, because growth itself will help us to reduce our borrowing and debt. The alternative is to consign ourselves to a decade of austerity, low growth and low employment, which I do not think would be the right thing for this country. As I said, in the past, there have been many and varied fiscal objectives under successive Governments. Since 1997, however, our fiscal objectives have remained in the medium term, to ensure sound public finances so that spending and taxation impacts fairly between generations, and in the short term, to support monetary policy and to help to smooth the path of the economy. Despite the disruptions of the past couple of years, those objectives remain important, and to get back on that course we need to get borrowing down on a reasonable time scale. The Bill requires the Government to set out a fiscal plan for delivering sound public finances, which must be approved by Parliament, and places a duty on the Government to meet that plan. As I said earlier, it gives Parliament a clear role in setting and monitoring the Government's medium-term fiscal plans. Parliament must approve those plans before they become law, so this Bill gives the House a new opportunity to scrutinise the Government's plans. Over the past few months, there has been an understandable desire to reassert the authority, in particular, of the House, and I believe that the Bill is one way in which we can do that. It represents a substantial strengthening of the fiscal policy framework in response to the challenges we face while enabling the House to exercise greater scrutiny, not just through Select Committees, but through the House sitting in this Chamber.