Fiscal Responsibility Bill

I am put to shame by my hon. Friend's brevity, because that is what I have basically been saying for the past 10 minutes. He sums up the situation brilliantly. I cited the examples of a huge threat to national security or a double-dip recession, but we could doubtless think of other exceptional but nevertheless imaginable circumstances in which the straitjacket of this legislation would simply not be in our interests. When that problem came up on Second Reading, the Chancellor, with a waft of his hand, said, "Oh well. In those circumstances, we'd just ignore it." I am paraphrasing, but I should have the exact quote—it might have been still more casual, something like, "Of course we wouldn't be bound by this legislation in such circumstances." That prompts the question why we have been invited to spend hours in the Chamber when the legislation, as I understand it, is in practice a set of guidelines to which Ministers can adhere if they find that convenient, but ignore if that is a preferable option. Of course, the Government can do that in any case. If the Bill can be discarded on a whim, and if there are no sanctions for doing so, why have it at all? On that basis, I tabled amendment 4, which would allow the provisions to be suspended for one year, which could of course happen repeatedly if that was felt necessary. I have sought to introduce a procedure that would give the Chancellor's casual observance a legal basis. I am not in favour of the Bill—I think it is utterly absurd—but if we are going to have it on the statute book, and if the Labour Members packing into the Chamber to weigh up the arguments cannot be persuaded of the case that I and others are making, we might as well have a measure that works and that is at least vaguely credible in terms of its practical application. To have no contingency, which is the case at the moment, seems ridiculous. My hon. Friend alluded to the fact that that is particularly so because the Prime Minister who claimed to have abolished boom and bust has now presided over the biggest peacetime deficit in our history, or certainly for a very long time—I have actually been told that our deficit might have been greater in 1921. He is now introducing legislation that seems to be predicated on the assumption that, despite all evidence to the contrary, boom and bust has been re-abolished and there is no danger we will encounter it again. Of course, that is not the Government's position in practice. The Chancellor announced in 2008 that he would break the Government's much championed golden rule, and when he was asked why he was doing that, he replied:""To apply these rules rigidly in today's changed conditions would be perverse."" That is precisely the point I am making. It would be perverse to apply this Bill, were it to become an Act, in the scenarios that I have been discussing. Amendment 5 would require the Treasury to report on, and the House to approve, the accuracy of the public sector net borrowing projections that the Chancellor made in the Budget 2008, the pre-Budget report 2008, the Budget 2009 and the pre-Budget report 2009. The amendment may appear, on first inspection, to be somewhat tangential, but I tabled it to emphasise the incompetence of the Government in their forecasts and management of public sector net borrowing, and ask the valid question why the Government expect us to have any faith or confidence in their ability to make these projections through to 2016. In previous debates, the Chancellor has said—I paraphrase slightly—that although the forecast for borrowing for this year was £175 billion and has now gone up to £178 billion, he has always made it clear that the figure would be roughly of that order and nothing surprising has happened. But that is not the case. The latest estimate for the deficit for this financial year, which ends in a few months, is £178 billion. In the Budget in 2008—less than two years ago—the Chancellor predicted that borrowing this year would be £38 billion. He was out by £140 billion. He then revised the figure upwards in the PBR at the end of 2008 to £118 billion. In the Budget 2009, only a few months later, it was up to £175 billion—a £57 billion increase in only a few months. Then it went up again by another £3 billion in the PBR only a few weeks ago. My point is that the Government's projections for the public finances were emphatically wrong, out by £140 billion. In the Budget 2008, less than two years ago, the Government prediction for borrowing in 2010-11 was £32 billion. They are now predicting that it will be £176 billion. For 2011-12, the Government predicted £27 billion of borrowing, and now they predict £140 billion. The Government's estimates are way off beam. They underestimate our borrowing requirements by almost £3 billion a week. Now they seek to give us a projection of their intentions right through to 2016 and invite us to take that seriously. As I said on amendment 4, we do not know what will happen between now and 2016. We must have a plan in place with some intelligent, sensible guidelines that take account of the state of the economy and the need to reduce our huge deficit as quickly as we can, consistent with not damaging the economic recovery or economic growth and with maintaining the level of public services that people in this country want. It is a balancing act. A quarter of public spending is unfunded at present. There are no simple solutions and we are in a very difficult position, but the idea that there is some magic formula that can be put forward in a six-clause Bill, when the Government cannot even work out two years in advance their borrowing requirement, is entirely fanciful. On that basis, I hope that the Committee will debate with enthusiasm, and support, amendments 4 and 5. Depending on what the Minister and others say, I might seek permission to press amendment 4 to a Division.