Fiscal Responsibility Bill

My hon. Friend returns to a point that he made in an earlier intervention. I listened to it carefully, and I probably agree. The Americans deal with the same issue using their distinction between discretionary and non-discretionary funding in the federal budget. This debate takes place against the backdrop of an election. The respective claims of the major parties on the public finances will come to the fore, and the danger is that there will be a bidding war. Each party will claim that it can do more than its opponent to tackle the deficit, with less pain than its opponent. That will not make for an enlightening election. It could lead to a further erosion in the credibility of politics and politicians, to which I alluded at the beginning of my remarks. I am grateful to my hon. Friend for mentioning my book. In it I suggested a way out of the problem—a way that might bolster rather than erode the credibility of respective claims of the parties, particularly at election times. My proposal was quite straightforward: in addition to creating a fiscal policy committee, which is similar to the proposed office of budget responsibility, I suggested that to bolster the credibility of the Government and Opposition parties' policies on tax and spending in the months prior to an election, that body should examine all their pledges and come to a view about the bottom-line effect on the deficit. It would be quite reasonable to ask that institution to undertake that work for any party registered under the Political Parties, Elections and Referendums Act 2000 and to publish the assumptions on which it came to its conclusions about the scale of the parties' pledges and their implications for public borrowing. If it did that it would concentrate the minds of politicians when they make exaggerated claims on economic and financial policy, especially at election time. Such a measure would raise the quality of debate in elections and of public discourse about economic matters between elections, giving the public greater confidence in the statements of politicians. A major Opposition party might be reluctant to subject itself to such scrutiny, but what credibility would such a party have? It might supply inadequate information about its policies, thereby preventing meaningful costings to be made by the office of budget responsibility. If it did, the OBR should say so and let the electorate draw its own conclusions. At election times, such a measure is still achievable, even if things have to be done in more of a rush. The Government's costings would be largely straightforward: after all, one function of the OBR would be to have a firm grip on Government pledges. In any case, before the Government went to such a committee, they would have available to them the full resources of Whitehall in order to cost any additional pledges that they wished to unveil in their manifesto. As for the Opposition parties, any party worth its salt and challenging seriously for power would want the credibility of its economic plans endorsed by the OBR. The party would be likely to engage with the office well before it published its manifesto, and it should be permitted to do so confidentially. In Committee I intend to table an amendment to give effect to this proposal, and I very much hope that it secures cross-party support. The agenda of British politics has been set by Labour: it is to repay Labour's debts. That will be a huge and painful undertaking, affecting the entire British population. Labour's only hope of restoring confidence in itself would have been to set out the spending measures required to plug the deficit. That is Labour's duty, after all: it is still in government. But even if it had done so, I am not sure how much weight it would have carried with the markets or with the public at this stage, because the canker at the heart of Labour economic policy derives not just from its credibility on fiscal policy, but from a deeper collapse in confidence: confidence in the Government's ability to take any correct decisions for the country—the confidence that can, in turn, be built only on the sound foundations of economic competence. When the economic history books are written, the writers' pens will above all linger not on the Government's intentions but on their incompetence. How was it that a Government inheriting such a strong economic legacy could have so easily squandered it? How was it that so little could have been bought with so much extra public spending? Even two years into this crisis, Labour still tries to return to the tactics of the past decade—the tried and failed tactics of rhetorical devices, which we have in this Bill, as a substitute for something solid. The Bill's title could usefully serve in one of those history books as the heading for a final chapter. It could read: "All credibility gone: the Fiscal Responsibility Bill is brought to the House." It would describe willing the end without the means and yet another addition to the catalogue of gesture politics. The decision to postpone the spending review has been crucial. Those who argue that the Bill is merely a cheap political trick to avoid disclosing the pain that Labour would have to inflict on the electorate get at only half the truth. The Government appear to have no notion of how to implement the measures required to give effect to the good intentions of the Bill, and that is symptomatic of so much policy making over the past decade. Their response to any problem has all too often been to seek to legislate it out of existence, and, when disappointment has inevitably followed, the tendency has been to blame others, especially Whitehall officials, and the wider public service, for a so-called "failure to deliver". We have therefore had a succession of initiatives, most of them equally misguided, seeking to deal with the problem through efficiency units, a succession of studies, the tsars and so on. Ministers hoped that those measures would compensate for Whitehall's alleged shortcomings, when the shortcomings that mattered were really much closer to home. It is the bankruptcy of ideas and, above all, of understanding how to translate intentions into action, more than the financial bankruptcy, which this Bill illustrates.