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Lord Brooke of Alverthorpe: My Lords, I apologise for arriving in the Chamber late, after the Statement had commenced. I also apologise to the House for unwittingly leaving my mobile telephone on.
On behalf of Peers on the Labour Benches, I embrace the review with enthusiasm and with great acclamation for the efforts undertaken by the Chancellor. I believe that the noble Lord, Lord King of Bridgwater, was also like myself late arriving in the Chamber for the Statement. It has been said that first impressions can often be wrong. I wonder, in that light, whether the Minister would be prepared to repeat the comments that he made earlier, that invariably the initial reaction of the Opposition to the Chancellor's pre-Budget Statements and on the comprehensive spending reviews has been wrong, as has the initial reaction from independent economic advisers, and the Chancellor has been proved right. Would the Minister care to repeat that so that everybody understands it?
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Lord McIntosh of Haringey: My Lords, unfortunately I have civil servants who report to me and brief me, so I cannot do the kind of political activity that I would wish to be done and which I am sure could be done. I am sure that my noble friend Lord Brooke is right that I could not only assert but prove, if I had the resources to do so, that the Chancellor has, in every one of the Budgets that he has produced, been more accurate in his forecasts than either the opposition parties or independent forecasters. Someday I shall get to prove it.
Lord Marlesford: My Lords, the Minister knows that I have always been prepared to pay tribute to the Chancellor for the fundamental approach that he has taken to economic policy, particularly in the early years of the two governments over which he has presided. But I have always pointed out that that approach has been based on the sound economic Thatcherite policies to which he has stuck pretty well.
Does the Minister recognise that to propose increases in public spending of £61 billion, which is 5.5 per cent of the current GDP of £1.1 trillion, is a very big increase? The source of money for such an increase is very doubtful, because the Chancellor has already had the great savings from unemployment reduction, and the reduction in debt payments. It is unlikely that unemployment will go down further, and interest rates are going up rather than down. When the Chancellor says that the increase is based on savings on people—apart from the fact that the number of people involved in government has increased hugely under the stewardship of Mr Blair—does he recognise that it is likely that the tide is coming in faster than he can bail out the pools on the beach?
My final question is quite simple. If it comes to a choice between cutting spending and increasing taxes, which is the Chancellor likely to do?
Lord McIntosh of Haringey: My Lords, when I agreed with my noble friend Lord Brooke that the Chancellor had been a better forecaster than independent forecasters or the opposition Front Benches, I can make a modest exception for the noble Lord, Lord Marlesford. At some risk of heresy, he has expressed support for much that the Chancellor has done over a period of seven years, and I pay tribute to his independence of mind in that regard. But now he is joining the doomsayers—and we shall see who is right.
Noble Lords should consider our track record and the arguments that the Chancellor deployed at the beginning of his speech, which I believe to be particularly significant, about what we have saved by our reduction in debt interest and payments for failure—in other words, for unemployment. When the noble Lord has an opportunity, which I know that he has not yet had, to read the White Paper in detail—which I also know, knowing him, that he will do—I hope that he will find that the figures are not only soundly based but extremely cautiously based. I would be glad to discuss those points with him. As was always the case, the assumptions made on public expenditure have been audited by the National Audit Office and, when appropriate, by the Audit Commission.
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I take slight issue with the noble Lord when he says that all the savings that we are proposing are savings on people, exactly for the reason that I have just given—that it is the benign result of years of investment in public services. That increase in capital expenditure in public services has made it possible to have the three-year spending review that I have already commended to the House.
Fire and Rescue Services Bill
Consideration of amendments on Report resumed on Clause 2.
Baroness Hanham moved Amendment No. 8:
"and shall only proceed with the proposed scheme, variation or revocation as the case may be if the inquiry concludes that the making of the scheme, variation or revocation is in the interests of greater economy, efficiency and effectiveness of the fire and rescue service or services concerned."
The noble Baroness said: My Lords, with Amendments Nos. 8 and 18 we return to the issue of regionalisation and the powers of the Secretary of State. Amendments Nos. 8 and 18 ensure that the power of the Secretary of State to initiate a scheme for creating combined fire authorities or to revoke or vary such a scheme—in effect his power to intervene to pursue a regionalist agenda at the expense of what is best for the public—would be limited by the findings of an inquiry that would focus only on whether the plans would deliver greater economy, efficiency and effectiveness to the fire and rescue authority in question.
In Committee, the Minister mentioned that the Government had already given ground by agreeing to hold an inquiry as the norm, were the Secretary of State to decide to use his powers under subsection (3)(b). We welcomed that development. As the Minister pointed out, were an inquiry to conclude that economy, efficiency and effectiveness were not best served by a particular combination or by a proposed change to a combination, the Secretary of State would be obliged to have regard to its findings. We do not believe that that assurance goes far enough. Having regard to the findings of an inquiry is not the same as accepting the findings of an inquiry.
I stress again that the fire and rescue services and the public will need to be assured that the modernisation or bringing together of the service is not premised on regionalisation and centralisation but on delivering improvements and on the best possible service structure. They need to know that there is a process that protects the public interest. An inquiry that finds that the Secretary of State's plans would not promote the greater economy, efficiency and effectiveness of the fire services cannot be ignored. It would need to be taken into account and accepted. Only an inquiry can decide whether the Secretary of State's plans are genuinely in the public interest or whether they have no operational merit.
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I hope that the Minister will be able to provide us with a stronger assurance that that will be the situation than he was able to give us in Committee. I beg to move.
Lord Rooker: My Lords, I will probably never satisfy the noble Baroness on the issue of the Secretary of State's powers. There will be a division between us because, as she clearly indicated, the amendment seeks to limit the Secretary of State's scope for action. The inquiry is an important element and to have regard to it means that it cannot be ignored. I cannot put into the Bill words that are not there.
We do not wish to fetter the Secretary of State. As I have repeatedly said, the Secretary of State must act reasonably at all times. He cannot act on a whim or a hunch or out of prejudice. As a Minister, he has to act reasonably or we can be called to account. Therefore, these amendments are wholly unnecessary.
The Secretary of State can make a scheme only if he can satisfy himself—as I said, that is not a personal satisfaction—that economy, efficiency and effectiveness—or, following Amendment No. 2, public safety—are best served by a particular combination or by a change to one. In deciding whether there are grounds to make a combination, the Secretary of State would have to take the findings of the inquiry into account. He cannot ignore an inquiry. That is the reality. He must give the findings great weight. One does not have an inquiry unless one is going to take account of it. That is the situation in this case.
We do not believe that the Secretary of State's discretion should be fettered. This has been the theme throughout the Bill. There might be circumstances in which an inquiry concludes that a combination scheme, or the variation or revocation of an existing scheme, is justified on grounds of economy, efficiency and effectiveness but the Secretary of State, taking a wider view, has sound reasons, which he would have to explain, to disagree with the findings of the inquiry; for example, on the basis of the overriding needs of public safety. I cannot put forward examples to explain but because it is not possible for the Secretary of State to act irrationally and unreasonably he would have to give great weight to the report of an inquiry, which will be a matter of public record.
We need to have the possibility of the Secretary of State exercising his discretion. We would be failing in our responsibilities if we took that away from him. I know that that will not satisfy the noble Baroness but a need for the Secretary of State to have regard to an inquiry also means that he cannot ignore it.
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