Fiscal Responsibility Bill

No, because the Chancellor would quite obviously have to come back to the House if circumstances were as severe as those that pertained a couple of years ago. I do not think that anybody would argue for getting ourselves into a position through legislation where the Government were completely hamstrung and could not effectively govern the country. That would be nonsense. However, it is important that there should be a discipline and a clear sense of direction on reducing the deficit. Clause 2 sets out a duty that the Government must continue to have a fiscal plan after 2016. That will be done by order, so the Government can decide what is appropriate. Again, the matter has to come back to the House. There is also a provision in clause 2 to give the Treasury the power to add further duties to the Government's fiscal plan. We have illustrated how we do that. For example, a draft order was published on the day of the pre-Budget report requiring the Government to ensure that borrowing as a share of GDP came down to 5.5 per cent., which is more than halving the deficit. As we look to the future, if we can get growth that is more robust than in my forecast, borrowing will naturally fall faster. It would then be possible to reduce that borrowing further in the medium term. However, at this stage, I believe that the course that I have set out is the right one. Clause 3 sets out various reporting requirements, so that the House has an opportunity to see what progress is being made. The Treasury must report on whether it has succeeded in fulfilling the duty that is imposed upon it—that is, on whether borrowing as a share of GDP is lower—and also ensure that debt is falling. If the targets are not met, the Treasury has to explain to Parliament why that is not the case. Again, that is subject to scrutiny by Parliament. There will be a revised code for fiscal stability, which I shall make available before Committee, so that there can proper scrutiny of it. Clause 4 makes it clear that it is to Parliament that the Government are accountable for approval of, progress towards and compliance with their fiscal plans. I see that the reasoned amendment calls for the creation of a new independent body to monitor and demand fiscal action, but I believe that Parliament should hold the Government to account for their fiscal policy, not a quango, an external body or, indeed, the courts. The Government are accountable to Parliament and, through Parliament, to the people.