Budget Responsibility and National Audit (Fiscal Mandate) Bill [HL] — House of Lords, 2016-09-09
Topic: Macroeconomics
Bryan Davies (Labour, Centre-left): My Lords, I begin by welcoming the noble Lord, Lord Young, to our counsels. He has occupied significant roles in the other House, particularly as Chief Whip. Having served nearly a decade as a Deputy Chief Whip, I live in awe of Chief Whips. He will appreciate that Whips in this House have the chance to present their case. I am sure that we will all benefit from his contribution and I look forward to hearing what he says in response to this debate. I have no doubt that it will have robust content, and he will expect robust content from me in support of the Bill I congratulate the noble Baroness, Lady Kramer, on introducing the Bill and certainly support its main proposals. I recognise that the Liberal Democrat party has a fairly exiguous base in the other place, but it was nevertheless noticeable that when the shadow Chancellor introduced a Motion to similar effect in the Commons about the necessity of the Government producing a much more expansive remit of their position, the Liberal Democrats were not represented in full force. Even their leader was absent from the Division I am very glad that the noble Baroness has articulated so ably the importance of these issues today, because we are not pushing at an open door. The Prime Minister may have dropped one or two hints that things will not be quite as they were in the past, but I have seen no articulation from the Government of a significant change in economic strategy and await that development with obvious pessimism We in the Labour Party are always positive about constructive ideas, and we are glad that this one has had a clear airing in the House, which is why I speak in support of the Bill. The noble Baroness will know only too well that we need a response and action somewhat earlier than the Bill is likely to provide, given its somewhat hazardous progress through this House—even more so when it gets to the other place. She will forgive me if I do not rely too much on the Bill for a government response to our economic travails. Action must be predicated in the Autumn Statement, which ought at least to indicate that the Chancellor will demolish the economic strategy which has obtained under the Conservative Administration over the past six years or so The Government have had three attempts to establish charters of Budget responsibility, which are part of that unforgettable concept, the long-term economic plan, a phrase which I think is destined for a quiet burial over the next few months. I cannot see too many government Back-Benchers in the other place, let alone in this rather more perceptive House of Lords, giving vent to the long-term economic plan if, as I predict, the Government seek to wriggle free of the present constraints which the noble Baroness identified so well. They have to move on that, because each of the charters of Budget responsibility have ended. Even the noble Lord, Lord Bilimoria, who is quite independent in his judgment on these matters from the Cross Benches, as we would expect, and gives us the benefit of a businessman’s perspective, indicated that there had been some failures in these attempts to develop an economic strategy. Only one principle has stood the test of time—and it is not that of reducing the deficit as intended, at the rate intended, or putting the economy on an even keel. What has obtained is austerity. I very much doubt that we will get an enormous change from that position The noble Baroness, Lady Kramer, invited the Government to revise their perspective and priorities in a dramatic way, in being concerned about economic competition and fairness between generations. My goodness me—I hope the Government recognise how we are treating one generation, the younger generation, unfairly. We are making higher education for them increasingly difficult, with tuition fees. We have this madcap idea to introduce secondary modern schools as rapidly as possible to define two-thirds of the population, if not more, as failures at the age of 11. Young people have seen a decrease in their earning power as a category over these years. That is unfair, and the Government need to recognise that unfairness in due course will cost them dear. I applaud the proposal made by the noble Baroness in her Bill that the Government should address themselves to inter-generational fairness I hope that the Government will be prepared to recognise that without growth we cannot be fair to our population, nor can we hope to reduce the debt successfully—and without growth we condemn our society to declining living standards. It is important that the Government recognise their record: for the vast bulk of the population, there has been no increase in living standards over the past seven years. As the noble Baroness, Lady Kramer, said, the key test is certainly investment. Of course, the Government emphasise the projects that they have under way. The trouble with the list of projects is that a very small number of them have actually had the shovel applied over the past few years; documents have been circulated rather than investment being carried out. That is why it is clear that the test of the Government over these next few years will be the extent to which they address their preoccupation with reducing government spending and the constant emphasis on austerity, and look to provide some optimism in our economy and the development of growth. Against that background, none of us underestimates the challenge presented to the Government by Brexit. We all recognise that, whereas stability and certainty help investment, a major shock such as that is bound to present the Government with an enormous challenge. They are going to be tested, but the test will not be on the reduction of debt at the end of those years but the extent to which the economy has been placed on a path towards growth I commend the Bill and look forward to the Minister’s response.