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Mr. Tyrie:
I am grateful to the Minister for giving way-he is being extremely generous. In my remarks, I said that once we had won on amendment 2, it would
have consequential implications for the targets that we in the Opposition would want to follow were we to be foolish enough to end up with this Bill on the statute book. The Minister knows very well that his point is disingenuous, and so his point about thinking seriously about voting for the amendment is nonsense.
Ian Pearson: The Opposition can decide what they want to do and whether they want to force a vote. Amendment 2 is very clear, and its implications would be that the deficit would be cut more slowly than the Government propose. That runs counter to the Opposition's policy. That is why they seem to me to be confused and muddled in their thinking and in what they are trying to achieve with their amendments.
Given the profound impact of the global financial crisis on the deficits and the national debt in all major economies, it is right to focus on reducing the deficit and stabilising debt. That is what the Government are trying to do, and it is what we are proposing to do through clause 1. The amendments are confusing and muddled, and although I do not disagree with the overall principle of wanting to get structural borrowing down-that is, of course, a right and sensible thing to do-I do not think the amendment is helpful, and I hope the hon. Member for South-West Hertfordshire will withdraw it. If he does not, I strongly advise my hon. Friends to resist it.
Mr. Gauke: This has been a useful debate, and I thank the following right hon. and hon. Friends for their contributions: my right hon. Friend the Member for Wokingham (Mr. Redwood) and my hon. Friends the Members for Chichester (Mr. Tyrie) and for Stone (Mr. Cash) for their speeches, and my hon. Friends the Members for Sevenoaks (Mr. Fallon) and for Braintree (Mr. Newmark) for their interventions. It is also noteworthy that, clearly after the Government Whips had trawled through the Tea Rooms and the Palace in general, we have had a contribution from the Labour Back Benches. However, in the speech of the hon. Member for South Derbyshire (Mr. Todd), his thoughtfulness, as always, got the better of him, and his remarks were hardly the ringing endorsement that the Government would have wanted. To paraphrase his argument, what he said was, "I'm not sure this Bill will ever become legislation, but it does at least give us an orderly process for discussing the matter." That is a reasonable point, but I am not sure that the big moment the Government have been waiting for was a Back-Bench Member speaking in support of the Bill in such a fashion. There have also, of course, been a number of other Back-Bench contributions questioning the Government's proposed policy, such as that from the hon. Member for Luton, North (Kelvin Hopkins).
I shall not enter into a wider debate about clause 1, as we will have opportunities to exchange selective quotations again when we move on to a future group of amendments. I shall, however, talk briefly about the Minister's remarks. I am grateful for two points that he made. First, he accepts that all political sides agree on the need for automatic stabilisers. Sometimes, Government Ministers-and in particular the Prime Minister-are less careful in their characterisation of Opposition policies than the Minister, and it is right that he said that. It is also welcome that the Minister displays a degree of honesty as to the difficult future choices the country faces; at
least there was none of the "cuts versus investment" nonsense that has so characterised the Prime Minister's utterances on this matter over the last few months.
On fiscal targets, the Minister made the point that Ministers should be accountable to the House, which raises the question of why we need to put all this in legislation in the first place. It is entirely otiose-to use a word of which the Minister is fond-to do this. He also fully accepts that the structural deficit is a valuable measure, but he brings into question certainty in that regard. This Government have, of course, relied on cyclical measures for most of the time that they have been in power, and I know that that is not necessarily the strongest argument in favour of cyclical measures and targets, given how they were abused. However, the Minister did not say anything that got to the heart of amendments 1, 2 and 3, which is that, even if we accept that there is a need for a straitjacket-which we do, although we are doubtful about the need for a legislative straitjacket-it is important that we have the right straitjacket. This is the wrong straitjacket. Given that the Chancellor has said that if there was another banking crisis, he would just have to come back to the House and ignore the Bill, it does nothing for the credibility of these targets, and the Government's policy on the deficit, to have in place the wrong measure.
I remain confused about the Minister's argument that our proposal suggests cutting the deficit more slowly than the Government propose in both cases. He referred particularly to amendment 2, which relates to subsection (2). We end up with the relevant measure of borrowing by 2014 being half of what it was in 2010. I look at the numbers in the pre-Budget report, and the Government's projections show public sector net borrowing falling from 12 per cent. to 5.5 per cent. and the cyclically adjusted PSNB falling from 8 per cent. to 3.6 per cent. The ratio of those numbers in both sets is almost identical, so I do not think that that is right. It enables the Bill to take into account economic growth and the economic cycle. If economic growth turns out to be faster than the Minister anticipated, it would mean reducing borrowing by even more, and there will be scope to do so.
Clause 1 misses the main target and nothing that the Minister said today addresses that. I say to Labour Members, some of whom, I hope, will have listened to the debate, that ours is a more sensible and pragmatic approach. Let there be no doubt that we are very serious about the deficit and we think the Government are taking too long to address it.
In conclusion, I intend to press amendment 1 to a Division. Were that to be successful-on the balance of the debate in the Chamber, it should be-I shall press amendments 2 and 3. For the moment, I shall press amendment 1 to test the mood of the Committee.
Question put, That the amendment be made.
The First Deputy Chairman: I have now to announce the result of the Division deferred from a previous day on the question relating to Adjournment (February). The Ayes were 248 and the Noes were 194, so the Ayes have it.
[The Division list is published at the end of today's debates.]
Mr. Jeremy Browne: I beg to move amendment 4, page 1, line 14, at end add-
'(4) The Chancellor of the Exchequer may, for the purpose of securing sound public finances, by order made by statutory instrument disapply this section in relation to any period of not more than one year beginning with the coming into force of the order.
(5) The Chancellor of the Exchequer must not make an order containing, with or without other provision, any provision disapplying this section in relation to any period unless a draft of the order has been laid before Parliament and approved by a resolution of the House of Commons.'.
The First Deputy Chairman: With this it will be convenient to take the following: amendment 5, page 1, line 14, at end add-
'(4) This section shall not come in to force until the Treasury has laid before the House of Commons a review of the accuracy of the projections of public sector net borrowing contained within-
(b) The Pre-Budget Report 2008,
(d) The Pre-Budget Report 2009.
(5) A review under subsection (4) is subject to approval by resolution of the House of Commons.'.
'(1) This Act comes into force on such day as the Treasury may by order made by statutory instrument appoint.
(2) No such order may be made unless a draft of the statutory instrument containing it has been laid before Parliament and approved by a resolution of the House of Commons.
(3) No such draft may be laid until the Treasury has conducted a consultation on the contents of this Act and laid before Parliament a report setting out a summary of responses.'.
'(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.'.
Mr. Browne: I and my colleagues tabled amendments 4 and 5. To follow on from the observations of the hon. Member for Chichester (Mr. Tyrie) on the last group of amendments, there is indeed an Alice in Wonderland quality to the Bill-it is extraordinary that we are all being invited to spend a whole day discussing it.
I said in my last contribution that when I was doing a radio interview recently a Labour MP said to me, "What do you mean we don't take the deficit seriously? We are bringing in a law to deal with the deficit," as though passing legislation and having a positive set of policies and a desire to implement them were one and the same. Clearly they are not. The very same Labour MP, in the same radio debate, maintained that the principal party of opposition to the Iraq war was hers as well. The whole Labour party is now in a state of complete denial about its position in politics, and nowhere is that more true than with regard to the enormous budget deficit that it has presided over. It told us that it had abolished boom and bust, that Britain could enjoy continuous economic prosperity and growth, and that the normal economic cycle that had applied throughout history no longer applied under the current Prime Minister. That has now emphatically been proven not to be the case.
Clause 1 has three specific duties. In an intervention a couple of hours ago on the right hon. Member for Wokingham (Mr. Redwood), I perhaps caused some confusion by mentioning the aspect of the Bill that has attracted the greatest attention-halving the deficit in what people assume will be the lifetime of the next Parliament, if it runs a typical length of time. However, there is the added inflexibility of the requirement to reduce the deficit year on year, through to 2016. There is therefore no scope for making adjustments based on exceptional circumstances. That should concern us all.
On Second Reading, I raised a matter with the Chancellor, and I am afraid that I did not get a good response. His response was evasive-I do not mean that he was disrespectful to the House, simply that he followed the logical consequences of his position. I gave two examples. First, I asked what we would do in the case of a massive additional threat to our national security. I hope that that is unlikely, but it is not impossible-we must have some sort of contingency plan and provision for an event of that magnitude.
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