House of Commons Public Bill Committee Proceedings

House of Commons

Session 2009 - 10
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Other Bills before Parliament

Committee of the whole House Proceedings: 20 January 2010
96

Fiscal Responsibility Bill, continued

‘The Treasury must establish an Office for Budget Responsibility, consisting

of—

(a)
a Budget Responsibility Committee, which shall have responsiblity for

overseeing the work of the Office for Budget Responsibility and

publishing its reports, and

(b)
a Secretariat of the Office for Budget Responsibility, which shall support

the work of the Budget Responsibility Committee.’.

Structure of the Office for Budget Responsibility

Mr David Gauke

James Duddridge

Not selected  NC9

To move the following Clause:—

‘(1)
The Budget Responsibility Committee is to consist of three permanent members,

of whom one shall be the chairman.

(2)
Appointments to the Budget Reponsibility Committee shall be made by the

Chancellor, for single non-renewable terms.

(3)
The Chancellor of the Exchequer may appoint a person under subsection (2) only

if he is satisfied that the person has knowledge or experience which is likely to be

relevant to the Committee’s functions.

(4)
Regulations shall specifiy the governance arrangements of the Office of Budget

Responsibility.

(5)
Regulations made under this section may not be made unless they have been laid

before, and approved by a resolution of, each House of Parliament.’.

Publications by Office for Budget Responsibility

Mr David Gauke

James Duddridge

Not selected  NC10

To move the following Clause:—

‘(1)
The Office for Budget Responsibility shall publish fiscal forecasts not less than

twice a year including in advance of the Budget and Pre-Budget Report.

(2)
The forecasts published under subsection (1) shall cover the Forecast Period set

out by the Chancellor of the Exchequer under section [Mandate of the office of

budget responsibility] (3).

(3)
The forecasts published under subsection (1) shall make clear any uncertainty

surrounding those forecasts by providing a range of outcomes around the central

forecast and the probabilities associated with those outcomes.

(4)
The Office for Budget Responsibility shall publish, at the time of publication of

forecasts under subsection (1)—

(a)
its judgement on the sustainablity of the public finances within the

forecast period,

Committee of the whole House Proceedings: 20 January 2010
97

Fiscal Responsibility Bill, continued

(b)
its recommendations as to the net discretionary fiscal loosening or

tightening it deems necessary by the end of the forecast horizon in order

to ensure a better than fifty per cent chance of meeting the mandate for

the public finances set by the Chancellor of the Exchequer, and

(c)
the consequences over the forecast period and beyond of any significant

deviation from its recommendations.

(5)
The Office for Budget Responsibility’s publications shall not contain any

judgement on the balance between public spending and taxation within the net

discretionary fiscal loosening or tightening it deems necessary to achieve the

mandate set by the Chancellor of the Exchequer.

(6)
The Office for Budget Responsibility shall also publish reports on the following

matters not less than once a year—

(a)
an assessment of all the Government’s fiscal liabilities, including

estimates of public sector pension liabilities and the net present value of

future payments in public finance initiative projects;

(b)
an assessment of the public finances over the next fifty financial years

under exisiting Government policies, including other trends which may

have a significant impact on the public finances;

(c)
an assessment of whether the medium term mandate for the public

finances set by the Chancellor of the Exchequer is consistent with the

sustainability of the public finances over the time period in paragraph

(b).’.

Mandate of Office for Budget Responsibility

Mr David Gauke

James Duddridge

Not selected  NC11

To move the following Clause:—

‘(1)
The Chancellor of the Exchequer shall set a mandate for the public finances over

the Forecast Period.

(2)
The mandate shall include targets in the final year of the forecast period for—

(a)
a measure of public sector indebtedness, as expressed as a percentage of

gross domestic product, and

(b)
a measure of the current budget deficit, expressed as a percentage of

gross domestic product.

(3)
The Chancellor of the Exchequer shall define the length of the Forecast Period.

(4)
On each occasion when—

(a)
an Economic and Fiscal Strategy Report, or

(b)
a Pre-Budget Report,


is laid before Parliament, the Chancellor of the Exchequer shall include a

statement explaining whether the Treasury’s chosen trajectory for fiscal

aggregates over the forecast period consistent with the recommendations of the

Office for Budget Responsibility.’.

Committee of the whole House Proceedings: 20 January 2010
98

Fiscal Responsibility Bill, continued

Access of Office of Budget Responsibility to Government information

Mr David Gauke

James Duddridge

Not selected  NC12

To move the following Clause:—

‘(1)
The bodies listed in subsection (2) shall have a duty to co-operate with the Budget

Responsibility Committee and the Secretariat of the Office of Budget

Responsibility by providing relevant unpublished forecast information on public

spending and taxation.

(2)
The following bodies shall have a duty to co-operate with the Committee and the

Secretariat as described in subsection (1)—

(a)
HM Treasury,

(b)
the Department of Work and Pensions,

(c)
Her Majesty’s Revenue and Customs, and

(d)
the Office for National Statistics.’.

Independent review of fiscal stability

Mr Jeremy Browne

Dr Vincent Cable

Mr Colin Breed

Dr John Pugh

Not called  NC13

To move the following Clause:—

‘(1)
The Chancellor of the Exchequer must appoint a person to review the operation

of sections 1 and 2 of this Act.

(2)
That person must, within 12 months of the coming into force of this Act, carry out

a review of those provisions and send a report on the outcome of his review to the

Chancellor of the Exchequer as soon as reasonably practicable after completing

the review.

(3)
That person must, upon the amendment by future legislation of any provision

contained in this Act, carry out a review within 12 months of that amendment

coming into force and send a report on the outcome of his review to the

Chancellor of the Exchequer as soon as reasonably practicable after completing

the review.

(4)
A report received by the Chancellor of the Exchequer under subsection (2) or (3)

above must be laid before the House of Commons.’.

Principles

Stewart Hosie

Not called  NC14

To move the following Clause:—

Committee of the whole House Proceedings: 20 January 2010
99

Fiscal Responsibility Bill, continued

‘(1)
The Treasury must ensure that Government debt is reduced to a prudent level.

(2)
Once debt is reduced to a prudent level, the Treasury must seek to maintain a

balanced budget on average over the medium to long term.

(3)
The Treasury must achieve and maintain a level of net worth that provides a

sufficient buffer against unforeseen future factors.

(4)
The Treasury must manage fiscal risks prudently.

(5)
Her Majesty’s Ministers must pursue policies which are consistent with a

reasonable degree of predictability about the level and stability of tax rates for

future years.’.

Duties for securing sound public finances

Stewart Hosie

Not called  NC15

To move the following Clause:—

‘(1)
The Treasury may make an order imposing on the Treasury a duty or duties

framed by reference to the principles in section [Principles].

(2)
A duty imposed by an order under this section must be one imposed for the

purpose of securing sound public finances.

(3)
A duty imposed by an order under this section may be a duty relating to fiscal

policy which the Treasury consider appropriate.

(4)
A duty imposed by an order under this section must be consistent with the key

principles in section [Principles].

(5)
An order under this section is to be made by statutory instrument.

(6)
No order may be made under this section unless a draft of the statutory instrument

containing it has been laid before Parliament and approved by a resolution of the

House of Commons.’.

Commencement

Stewart Hosie

Not called  NC16

To move the following Clause:—

‘(1)
Section 2 comes into force when the Treasury has laid before Parliament a report

containing an estimate of the impact on economic growth that will result from the

fulfilment of the duties set out in that section.

(2)
The remaining provisions of this Act come into force on Royal Assent.’.

Committee of the whole House Proceedings: 20 January 2010
100

Fiscal Responsibility Bill, continued

Penalties

Mr John Redwood

Not selected  NC17


To move the following Clause:—

‘If the Government fails to reduce spending by enough in any year to meet the

deficit targets in and under this Act, the Chancellor of the Exchequer and the

Chief Secretary to the Treasury will repay to the Treasury their salary paid to

them as Ministers that year.’.

Deficit reduction under the Act to be derived from changes in public spending

Mr John Redwood

Not selected  NC18


To move the following Clause:—

‘(1)
The deficit reduction shall be carried out through changes in public spending.

(2)
Any increases in revenue resulting from changes in economic activity and tax

rates shall affect the half of the deficit not covered by the mandatory clauses of

this Act.’.

Bill reported without Amendment.

Bill read the third time on division and passed.