[Relevant Documents: Oral evidence taken before the Treasury Committee on
I beg to move,
That this House
believes the role of the Office for Budget Responsibility should be enhanced to allow it to independently audit the spending and tax commitments in the general election manifestos of the main political parties, and calls for legislative proposals to enable this to be brought forward at the earliest opportunity.
Over the past four years, the Office for Budget Responsibility has become an established part of the framework for British economic policy-making with broad-based and cross-party support. It is vital that the OBR’s impartiality and independence is preserved. That was a point made by Members from all parts of the House when the OBR was established, and it is why there remains a consensus, which is reflected in the Budget Responsibility and National Audit Act 2011, that the OBR should not be drawn into party politics by commenting on the merits of individual policies or examining alternative policy scenarios.
I believe that the Chief Secretary to the Treasury is on a visit to the United States. It may be that the Chancellor is engaged in rather more immediate and urgent matters that have cropped up in the past 24 hours, or it may be that he will arrive in the next few minutes to respond to this debate. I had assumed that the Chancellor would respond to this debate. I do not know whether you, Madam Deputy Speaker, have had any other guidance. Anyway, let us hope that he turns up.
In the meantime, and fully consistent with that consensus, it is our view that now is the right time to take a further step to enhance the role of the OBR. I will come on to explain our strategy and seek the views of the Chancellor, so he has about 10 minutes to get here.
“More feasible than making any hasty change to the OBR remit at this point would be to consider this option in detail during the five-year review of the OBR’s operation due to take place in 2015.”
How does the shadow Chancellor respond to that?
In a second. Perhaps not at all. [Interruption.] Go on then. I will come to the matter of the Institute for Government’s views in a moment, when I get to the issue of timetabling. I want to set out my approach to the law, timetabling and modalities, and I will do so in that order.
While the shadow Chancellor is outlining his proposals, it would perhaps be helpful if he could explain why he opposed the OBR getting involved in auditing these sorts of things in 2010, and why he has suddenly changed his mind now. Is it because he is concerned that the public have decided that he has no economic credibility whatever?
The hon. Gentleman will obviously struggle ever to have anything that might achieve a cross-party consensus in the national interest, but I will come to the political point he is making in a second. First, let me return to the serious matter that is before the House.
The OBR’s charter states that
“The Government is responsible for all policy decisions and for policy costings, i.e. quantifying the direct impact of policy decisions on the public finances. Subject to receiving sufficient information from the Treasury to do so, the OBR will provide independent scrutiny and certification of the Government’s policy costings. The OBR will state whether it agrees or disagrees with the Government’s costings, or whether it has been given insufficient time or information to reach a judgement.”
It is our proposal that the OBR play that role for the next election, not just for current Governments but for prospective Governments.
I said in my letter to the head of the OBR of
“The reform I am proposing would mean the Opposition would submit costings for proposed manifesto commitments on spending and tax—obtained from, for example, the House of Commons Library, Parliamentary Questions or the Institute for Fiscal Studies—and the OBR would ‘provide independent scrutiny and certification’ of those costings.”
Those are the exact words currently in the OBR’s charter.
I have not given up, Madam Deputy Speaker. I am hoping that if the Chancellor turns up he may end up welcoming this proposal, overwhelmed by the clarity and objectivity of the analysis that I am about to put before the House. Let us wait and see.
I accept that this reform, which I first proposed last September and has been widely discussed and debated since, is a radical change. This is the first time that any political party in Britain has said that it wants this kind of independent audit of its manifesto, but it is not without precedent. Countries that have adopted a version of this approach include the Netherlands, Australia, Canada and the United States. For the UK, while it is a radical change from what has gone before, we believe that it is the right thing to do to help restore trust in politics.
When whoever wins the next election is set to inherit not a balanced Budget, as the Chancellor promised in 2010, but on current forecasts a debt set to be £75 billion, it will be important for my party and for all parties to show that all our manifesto policies and commitments are properly costed and funded and independently audited.
I am pleased that the shadow Chancellor is trying to build a consensus, and of course he did write his letter in September last year. However, Robert Chote wrote to the Treasury Committee on
“If Parliament wished us to play this role in the 2015 election, we would need a very clear steer in the very near future to have any hope of putting the necessary practical arrangements in place to deliver a smooth process.”
Why has the shadow Chancellor waited for fully six months before doing anything about it?
I spoke to the head of the OBR last Friday, and I will come to my conversation in a moment. I appreciate the serious way in which the hon. Gentleman is engaging in the debate, and timing is one important issue that we need to discuss today. It is important to understand that if we choose not to go ahead we do so in a full understanding of the choices we have, the steps we would need to take and the actions that would be required on the relevant timetable. If we choose not to go ahead, it is important to understand why we are not going ahead. I will come to the hon. Gentleman’s point in a moment.
Owing to its importance, I have set out from the outset to forge cross-party agreement on this important reform. The House will know that the Chair of the Treasury Committee has been a long-standing advocate of this reform, as is the current head of the OBR, Mr Chote, who said at the beginning of this year:
“I believe that independent scrutiny of pre-election policy proposals could contribute to better policy making, to a more informed public debate.”
It is true that when the OBR was initially established there was caution on both sides of the House about this proposal. In the early days, when the OBR was establishing its reputation—I think it has established its reputation now for independence and objectivity—to be fair to the Chancellor of the Exchequer, when asked about this in October 2010, he said that this was
“a legitimate matter for the House to debate and to decide.”
No—once was enough. That was an encouraging thing for the Chancellor to say.
I have raised the matter in the House a number of times over the past nine months and each time I have urged us, in the spirit set out by the Chancellor, the Chair of the Select Committee and Mr Chote, to try to put politics aside and do the right thing. I am pleased to say that the Chief Secretary told the House, at Treasury questions a few months ago:
“The idea is well worth further consideration.”—[Hansard, 11 March 2014; Vol. 577, c. 173.]
We have not yet managed to achieve that cross-party consensus, but we still have a couple of hours.
All Members on both sides of the House regard Robert Chote as an outstanding head of the OBR. Has the shadow Chancellor not seen his comments that it is better to consider the issue at the beginning of the next Parliament, rather than rush into it for 2015 and risk undermining support for the idea, which we all think is important, in the longer term?
Either we find reasons not to proceed or we proceed. I spoke to Mr Chote last Friday. I will come to our conversation in a moment. It deals directly with that matter.
Given the cross-party approach and the interest, which my right hon. Friend has set out clearly, does he think that one of the reasons why the Chancellor and the Government have not agreed to the measure may be that they want to make misleading claims about the Opposition’s policies in the run-up to the election?
Were the Chancellor to say that the proposals in our manifesto were uncosted and simultaneously try to block our manifesto from being independently audited by the OBR, that would look as if he had a political motive. But as I said, I am still hoping that cross-party consensus will break out in the course of my speech. My hon. Friend is being too pessimistic. Let us give it another 10 minutes.
I will talk about legislation first, then I will take two more interventions.
Of course, there are a number of detailed issues to resolve. To that end, over the past eight months, I have had a series of discussions with the permanent secretary to the Treasury, with the head of the OBR, and in the normal course of parliamentary business with the Chair of the Treasury Committee and others, and I want to update the House on where I think we are.
First, on the question whether primary legislation is necessary, in the letter that I originally wrote to the head of the OBR, which I quoted a moment ago, I cited the previously declared view of the Chair of the Select Committee, who said that he was not fully convinced that the current legislation would not allow such a role for the OBR. It was uncertain, but he was not fully convinced.
However, the head of the OBR replied to me in October, saying that he had taken legal advice from the Treasury Solicitor’s department and that the view of the Treasury Solicitor was that a change in the law was required—that there would be a need for primary legislation. To that end, I wrote to the Chancellor on
At that time, the Clerks of the House of Commons informed us that with the Chancellor’s support and an amendment to the long title of the Bill, one option would be to table an amendment to the Finance Bill. It is just two clauses, so this change could be made well in advance of the 2015 general election. Regrettably, because there was no engagement on this two or three months ago, that change to the long title did not happen. If there was a way to table those clauses for Report stage next week, we would support a Government amendment to that effect. If not, and the Government wanted to bring forward primary legislation in the autumn, for example through a one-day Bill, we would give such legislation full support.
During the recent elections, we saw a lot of public dissatisfaction about what happens in and from this place. Some of that is to do with the lack of transparency and consensus on matters such as this. Would it not send an important message to the public if we had cross-party consensus on openness about manifestos and the figures within them?
I agree with my hon. Friend, and that is why we support the role that the OBR plays. The Government proposed an independent OBR, a reform that we supported, and in that spirit we want to extend its role, as happens in other countries. It is not unreasonable, and it would exactly help with the issues of trust to which my hon. Friend refers.
I am not entirely unsympathetic to what the right hon. Gentleman asks for, but is not the fundamental problem that even a shadow Chancellor as powerful and influential as he is does not have complete control over the shadow Cabinet, or even of his Leader, who make spending promises that are not part of the finance and budgeted proposals made by the shadow Chancellor?
I could ask the hon. Gentleman why on earth he thinks I want to have this independent audit: to make sure it is all done through the proper process. Perhaps I should say that. Actually, the shadow Cabinet has been exemplary in not setting out uncosted promises that cannot be delivered. We have made no claim to abolish inheritance tax. That is not a commitment in a manifesto that we have to renege upon. Nor have we made a commitment to abolish tuition fees. So the hon. Gentleman raises some issues here.
That is correct. I sent him draft clauses with an offer to reach a cross-party agreement around those. There are two ways in which we can approach these things. We can try to see off each other, or we can try to forge that consensus, and it is not too late. So let us give it another go.
The timetable issue has been raised by several hon. Members. The head of the OBR has told me that if we can reach cross-party agreement on the details of how we can take forward this role for the OBR during the summer, he would be content for the underpinning legislation to be put in place in the autumn. It is commonplace for Governments to move forward on a policy, to agree the details and modalities, while putting the legislation in place. He would be content with that, which brings me to the key timetabling issue.
A number of detailed procedural issues will clearly need to be worked through if the reform is to go ahead this year. When we met in February, following his discussions with the Select Committee, the head of the OBR told me that in his view we would need to have the discussions on the details concluded by the end of the summer. He said that that would be possible only if we could achieve in-principle agreement to proceed by the early summer, by the end of June.
I know that the head of the OBR is pessimistic that it will be possible to get that in-principle agreement, as we heard from David Rutley a moment ago. If there is no in-principle agreement to do this, it will not be possible to proceed in this Parliament. But I told the head of the OBR that we were having this debate today and that we still sought to achieve that consensus, and I asked for his view. He confirmed to me last Friday that his view at the beginning of the year is still his view today: that if we can reach agreement in principle to proceed by the end of June—in the next few days—we can work out the details over the summer, complete those discussions by the end of the summer, and put in place the legislation in the autumn, during which time the work of the OBR could commence.
I understand the view of the Institute for Government, which says that perhaps we should give up and do this in the next Parliament, but I do not want to do that because we owe it to the public to do the right thing. The head of the OBR’s view is that if the Chancellor and those on the Treasury Front Bench are willing to come along today and agree in principle to proceed, we can go ahead. There is no issue of timing and timetable to get in the way.
May I get to heart of the point about timing and consensus? We have already heard some quotes from Robert Chote. This is what he said when he gave oral evidence to the Select Committee and was asked whether this could be done by the next election: “It would be difficult but by no means impossible. The key thing that you would need to have is agreement in principle across the parties that it was a good idea to do it. At the end of the day, if Parliament wants us to try this, we will do it to the best of our ability given the resources and the time we have available.” Given that those statements are on the record, does my right hon. Friend agree that if this does not happen, it is because there is not a political consensus? I hope that the Minister will not say that this is about timing but will be up front about why the consensus is not there, and admit that she and her colleagues are blocking it.
My right hon. Friend is absolutely right. If we, as a House, decide to proceed in a cross-party way today, and in the coming days, this reform can be agreed over the summer, the legislation to back it can be put in place, and we can have independent audits of manifestos at the next election. It is not a matter of timetabling, because the head of the OBR says that it can be done: it is only an issue of political will. If, in the end, the Chancellor—who has not turned up—does not want to do it, it is not going to happen. It is not going to happen not because the OBR will not do it, because we will not do it, or because it cannot be done, but because Government Front Benchers do not want it to happen.
I have some sympathy with what the shadow Chancellor is trying to achieve. While he is right that the OBR should be beyond partisan politics, it is the case that it has not been beyond reproach in relation to its predictions and continues to be well out of line, given what we expected our deficit to have come down to. Does he recognise that this process is not going to draw a line under any disputes over matters to do with economic programmes? Ultimately, it will be a judgment by the voters rather than the OBR, and this process should not be allowed to take it out of their hands come election time.
Of course, none of us is beyond reproach, including the OBR and including the Chancellor. The OBR has had a few rather sharp things to say about some of the Chancellor’s practices over the past few months as regards fiscal decision making. In the end, of course the voters have to decide; they have to look at the manifestos and make their judgment. In our view, if an independent body—the OBR—scrutinises the costings of individual proposals to check that they have been done properly, that can only be to the benefit of the public debate. Ultimately, it does not take away the voters’ choice, but why would we choose to have them misinformed or uninformed when we could have them properly informed? That is the choice before the House.
Like the Chairman of the Treasury Committee, I fully support the principle, and if we can arrive at political consensus, I would be delighted. At the session from which my colleague on the Committee, Mr McFadden, quoted, Mr Chote put quite a lot of barriers and difficulties in place. At the end, he said that we should not rush this to arrive at an imperfect solution. Does the shadow Chancellor accept that if we cannot get it right, that is worse than doing nothing at all?
That is why I wrote to the Chancellor last October seeking to begin discussions and putting the draft clauses on the table. I have had a number of discussions with the head of the OBR, who has made exactly those points. He wants to know that the resources will be there and what the rules of engagement will be. He wants to know that this will be done properly. He wants to know, in particular, that the Government and the Treasury will engage in good faith with the process. Of course it is difficult, because so far the Chancellor has not been willing to engage with these discussions. I understand the hon. Gentleman’s concerns. However, I spoke to Mr Chote last Friday, and if we can reach agreement this week—by the end of June—he is content to proceed this year. If we are all in favour of the proposal in principle and enter into it in good faith, it can be done. Of course, if either side puts up impossible barriers in the discussions with the OBR, it will not happen. But I am up for it, and if the Chancellor was here, we could ask him whether he was too.
All I can say, once again, is that the head of the OBR is content to proceed. If the hon. Gentleman supports this reform, I shall share his frustration about the many months that have been wasted. I could have made this an issue of party political combat or criticism seven, eight or nine months ago, but I have said repeatedly at Treasury questions that I hope the Government will change their mind and engage. He is right that we will be timed out if we cannot make those agreements. If we can agree in the next week, we will have a full two months to work out the details. From my experience, I think that two months would be sufficient to agree on that if there is good faith on both sides.
There are moments when the hon. Gentleman engages seriously in these issues, but then he reverts to the Whips’ brief and the kind of behaviour that we expect from others. The truth is that we have been trying to engage on this for nine months. We have been serious, but the Chancellor has been absent. That is the problem.
I will make a little progress before giving way again.
In addition to primary legislation, which we need, and a timetable, because there is still time, the third issue is resources and modalities. In particular, who would the reform apply to? The head of the OBR is rightly concerned to ensure that this is a manageable process and that the resource implications can be taken into account. I have proposed that it should apply to governing parties and prospective governing parties. To that end, the legislation I delivered to the Chancellor in October proposed that the OBR should provide independent scrutiny and certification of the policy costings of any political party that has at least 5% of seats in the House of Commons, at the request of that party and subject to receiving sufficient information from it.
I should emphasise that my view has always been that that should be voluntary and that no party should be forced down that road, and that remains my view. Let me be clear that tough, rigorous and independent scrutiny of Labour’s election manifesto is important. I believe that it should be important for Conservative and Liberal Democrat manifestos, too. In tough times we must all ensure that all our policies are properly costed and funded, because people rightly want to know that the sums add up.
We are trying to have a discussion about an important reform for the future. There have been moments in the life of this House when consensuses have been formed. The Conservatives voted against Bank of England independence in 1998, but in the end they joined the consensus. They voted against the move from self-regulation to statutory regulation in our financial services, but in the end they joined the consensus. I think that there is now a consensus that we should not join the euro, but I wish there was a consensus that we should stay in the European Union, which would be a good thing. On this matter, however, we should be able to form a consensus.
I can agree that regulation of financial services under the previous Government was not tough enough, but I also say that, if he were here, the Chancellor of the Exchequer would agree that he criticised me at very stage, as did the Exchequer Secretary, for being much too tough on financial regulation, rather than too soft. The issue is whether we can form a consensus for the future.
I am grateful to the shadow Chancellor for giving way; he is being very indulgent. First, has Lord Eatwell joined his consensus or is he still opposed to it? Secondly—this is more relevant to the issue of party manifestos—the reality is that had we done this for the last election it would have been irrelevant, because we ended up with a coalition Government. Elections can have different outcomes, so has the shadow Chancellor thought through how the OBR would be able to make estimates in the event of a coalition Government?
It would be a bit unfair to ask Lord Eatwell, who has returned to academic life and is no longer on our Front Bench in the Lords, for ex-post agreement, although if I had to hazard a guess, I would say that he could join a strong consensus in this House that included a number of Conservative Members, as we have sort of heard today and read elsewhere.
Coalition is an important issue. Going into the last election there was no OBR, but there were costed proposals in manifestos, and, after the coalition was formed, costings for proposals put before this House through the Budget process were audited by the OBR. I do not think the OBR should be drawn into coalition negotiations after elections and manifestos, because it would probably be a mistake to draw it into the political process in that way. I understand the hon. Gentleman’s point, but I do not think it is an obstacle to proceeding.
I hope that in the final part of his speech, my right hon. Friend will come to the same conclusion as me, which is that the only reason Government Members could be against this proposal is that they are frightened that they will no longer be able to say that our plans are no good.
My hon. Friend, who regularly advises me on my speeches, can obviously see where this speech is going. I have worked hard to try to secure consensus. Despite the support of many influential figures, I have not yet managed to succeed in making it a cross-party consensus. The reason for that is that, so far, the Chancellor has not engaged. He has refused to co-operate with the discussions. He has not responded to my proposals and letters. He has not even turned up today.
The question is: why is the Chancellor so reluctant? The reason cannot be the need for primary legislation, because we will support it. It cannot be the timetable because, despite the protestations of Government Members, the head of the OBR confirms that there is time to get this done and to get it done properly. The Chancellor says that he wants to protect OBR independence, but so do we, and the head of the OBR says that this reform need not jeopardise that independence.
No, the hon. Gentleman has already had one go.
What is the issue? What is going on? I am afraid that it is not hard to conclude that the Chancellor sees this as an opportunity to play political games. [Interruption.] The more that Government Front Benchers laugh, the more we see the political games they want to play.
We know from the head of the OBR that if an agreement to proceed is reached by the end of June and we can conclude its details by the end of the summer, the OBR can independently audit all our tax and spending commitments for the next general election. It is just a matter of political will. The Chancellor wants to place political traps—through his aides, he very often tells people that he is setting them here and setting them there—but he is not willing to back an important reform in the national interest. What is going on?
Why is the Chancellor so keen to prevent Labour from having its manifesto independently audited, and so reluctant to put his own party’s manifesto through the same scrutiny? Might it be that, as the head of the
Institute for Fiscal Studies said at the last Budget, the Chancellor is “getting into bad habits” by making tax changes that appear to bring money into the Exchequer in the short term but have a long-term permanent cost to the public finances; or that, as the IFS said at the last autumn statement, he
“continues to make specific promises on spending increases while stating that he will keep total spending at the same level” and that he “can’t keep doing that”? The risk for the Chancellor is that people draw the conclusion that he wants the freedom to make promises in his manifesto that he knows he cannot afford and will not deliver, while making claims about Labour’s manifesto that he knows to be false, and blocking our desire for proper independent audits.
I have to tell the Chancellor and other Ministers that we remember the Conservatives’ uncosted promise to abolish inheritance tax last time around; and as for the Liberal Democrats’ promise to end tuition fees—enough said. My advice to the Chancellor, if he had turned up, and to the Chief Secretary, if he were here, would be that if they do not want to be reminded again and again of those mistakes, they should support our proposal and help us to forge the cross-party consensus we need.
It is hugely disappointing that the Chancellor seems determined to oppose this reform. I have tried hard to persuade him to put politics aside and to do the right thing. Our proposal would be the first ever such independent audit. We believe that it is essential to restore public trust in politics and to improve the nature of our political debate. It is not too late for him to come to the House to say, or to tell his Front-Bench colleagues, that he has changed his mind. I urge the House to vote to persuade the Chancellor to do just that—to change his mind, to stop playing politics and to stop blocking this important reform. If he fails to do so, people will rightly ask: what are they so scared of?
Order. Before I call the Minister to move the amendment, I must inform the House that a great many hon. Members obviously wish to speak in the very limited time available. I will therefore put a limit on Back-Benchers’ speeches of six minutes, which may well be reduced later if they take many interventions and speak for much longer than six minutes. I hope that hon. Members will behave with courtesy to others and keep their speeches short.
I beg to move an amendment, to leave out from “House”
to the end of the Question and add:
“recognises the important role of the Office for Budget Responsibility (OBR) in producing independent forecasts for the economy and the public finances, and the value this has had in restoring trust in official forecasts;
notes that the OBR is a newly independent institution and judges that it would not be appropriate to involve it in party political matters at its first election;
notes the comments made by the Chairman of the OBR, Robert Chote, in a letter dated
and supports the view expressed in that letter that it is ‘better to consider these issues at the beginning of the next Parliament’.”
I am sorry that the shadow Chancellor is disappointed that I am opening for the Government in this debate. I must say that I have only been in this House for just over four years, but it is always true in politics that there is a first time for everything. This afternoon, the shadow Chancellor accused the Government of playing political games and called for cross-party consensus, so there is a first time for everything and we heard it here first. The most sensible thing that he said in his speech was to offer Julie Hilling a job as his speech writer, so let us hope that his future speeches are dramatically improved.
The shadow Chancellor made his views on this matter very clear to the House, so I will begin by answering him with equal clarity. The Government do not believe that the OBR should cost the Labour party’s, or indeed any Opposition party’s, manifesto commitments for the election next year.
As I will come on to say, I do not think that the quotations in the amendment or the amendment itself are in any way selective. The amendment sets out the reasons why the Government are not supporting the Opposition’s motion. It does so very clearly, and the OBR, in its letter, sets out very clearly the reasons why it is not at this stage ready to cost the Opposition parties’ manifestos in the way that is wanted.
Let me assure the hon. Gentleman that I will keep to the consensual tone that the shadow Chancellor, often with great difficulty, tried to strike during this debate. The letter from Robert Chote makes it very clear that these issues would be better discussed at the start of the next Parliament. The reality is that, actually, the Opposition are looking for a fig leaf for their lack of an economic plan. That is the reality of the motion.
I spoke to the head of the OBR last Friday, who told me that if the House agrees to proceed, with Government support, by the end of June, he would be content, comfortable and pleased to proceed with the reform this year. So when the Minister says that he is against this reform, could she just correct the record, because I believe that to be incorrect?
It is all very well for the right hon. Gentleman to have a conversation with the head of the OBR, but we do not know the details of that conversation; if he is going to release a transcript, I would be very interested to read it. In fact, the letter dated
“To embark on this exercise in a rush, or with insufficient resources, could be very disruptive for the parties and very damaging to the OBR.”
Is the right hon. Gentleman saying that he wants it to be damaging to the OBR? I do not think that he does.
On the topic of misinformation, does the Minister share my surprise that the shadow Chancellor should have misrepresented the position of the Institute for Government on this, when he suggested that it was giving up on the idea of a reform of this kind in this Parliament? In fact, what it said—it was an expert judgment— was that:
“More feasible than making any hasty change…would be to consider this option…during the five-year review…due to take place in 2015.”
Does she not share my view that the shadow Chancellor should be invited to correct the record on what he said about that?
I thank my hon. Friend for that very good point. He has eloquently set out the misrepresentation by the shadow Chancellor of what was said by the Institute for Government. I am sure that perhaps through later speakers and in the winding-up speech the Opposition will have a chance to correct the record.
I am going to make some progress.
As our amendment makes very clear, we are not suggesting that the issues that the shadow Chancellor’s proposals present are insurmountable, but we do believe very firmly that the independence and operation of the OBR is critical. We need to make sure that independence and impartiality is preserved, and as such, Parliament would need time to scrutinise the proposals properly and the OBR still needs time to establish itself fully as an independent fiscal watchdog before being drawn into the political heart of a general election.
Let me turn to the situation that the Government inherited in 2010. First, it is worth reminding the Chamber of exactly why and when the OBR came into existence. Hon. Members will need no reminding of the economic inheritance left to this Government by the Labour party, and on taking office we recognised the need to act quickly in the short term to establish our country’s economic credibility for the long term. The creation of the OBR was vital in that respect.
Back in 2010, our country urgently needed a full and independent assessment of just how bad the problem was because, again and again, the possibility of fiddling figures was tempting, and some would argue that that temptation had been responsible for some of the greatest fiscal policy mistakes of the past 40 years.
One of the slightly odd things about the Minister’s line of argument is that in its initial reports the OBR predicted that growth would be much faster than turned out to be the case, which suggests that the situation then was not quite as dire in the OBR’s view as the Minister is trying to suggest. What happened, surely, was that Government policies then crushed growth.
I listen to the hon. Lady in debate after debate trying to reinvent fiscal history as we have seen it over the past four or five years. The motion before the House and the moves of the shadow Chancellor, are a desperate attempt to do that. As we have seen in the Labour party political strategy 2015, which was recently leaked to a Sunday newspaper, Labour has to rebuild its credibility on the economy. This debate is a blatant attempt to do just that.
I asked the shadow Chancellor this question but perhaps my right hon. Friend will answer. Does she find it strange that the shadow Chancellor, who said that he does not want to politicise things, did not see fit to bring this matter up for three and a half years? Suddenly the polls are saying that the Opposition have no economic credibility whatsoever, and he tables this motion and says, “Gosh. Why don’t we have all of our manifestos audited?” Is that a little strange?
The creation of the OBR has meant that for the first time we have a truly independent assessment of the state of the nation’s finances. As the Chancellor noted in his Budget this March, it is to its credit that
By giving the OBR power to produce the official forecast, we have managed to remove many of the risks of the past and put the UK’s fiscal policy at the cutting edge of international best practice. The IMF said that
“strong fiscal institutions can enhance the credibility of consolidation plans” and the shadow Chancellor wrote to Robert Chote affirming:
“Over the last three years, the Office for Budget Responsibility has become an established part of the framework of British economic policy with broad-based and cross-party support.”
I am sure that—it is not often I say this—we all agree wholeheartedly with the shadow Chancellor. It is also worth reminding right hon. and hon. Members that when the OBR was set up four years ago, it was deliberately designed to ensure that it would be independent and could steer clear of political wrangling. That independence and impartiality is crucial.
My right hon. Friend is talking about the credibility that the OBR is building. Bearing in mind the political knockabout we have had today, the bogus calls from the shadow Chancellor, and the clear party politics being played, does she think that it would damage the OBR’s credibility if we entered into the plan that the shadow Chancellor is offering?
My hon. Friend is absolutely right. One big issue that the Opposition have not addressed is that if this change were to be brought in without proper consideration, it would mean changes to the way civil servants work. That is something we value greatly in this country, and we would have to consider that issue when scrutinising any legislation.
I entirely agree with my hon. Friend, who, as usual, talks complete economic sense, unlike the Labour party.
As academic evidence noted at the time of the OBR’s creation, it is vital that there should not
“even be a scintilla of doubt…about the OBR’s independence and impartiality, as negative perceptions may undermine the OBR’s reputation, requiring a major effort at changing such perceptions”.
Unfortunately, the Opposition’s proposal not only presents a risk to that impartiality, but raises several difficult practical questions, which I shall go through briefly.
As the hon. Gentleman will know, meetings held by Ministers are published in the normal way. I cannot give him a specific number, but a list of meetings is published in the usual way.
In that case, the right hon. Lady is indicating that these discussions have taken place and that there have been meetings at which this issue has been discussed. If so, did the chair of the OBR indicate whether, if a consensus could be reached before the end of June, he could deliver these budget assessments before the general election?
I certainly did not indicate that. It is to be expected that Treasury Ministers will meet the head of the OBR and that various matters will be discussed, and we received a clear letter from him about the motion and the proposals before us today.
I want about to talk about the practical questions that would require much greater scrutiny in the future. First, as I mentioned, the Opposition do not seem to have assessed how their proposal might compromise the OBR’s ability to avoid being drawn into political debate or the real danger that such a change could undermine its perceived independence and, by extension, the credibility of the UK’s official forecasts.
I will make some progress, because I have already given way to the hon. Gentleman twice.
Secondly, the Opposition do not seem to have acknowledged that think-tanks such as the Institute for Fiscal Studies and the National Institute of Economic and Social Research already have a long and distinguished track record in providing costings to parties in the run-up to elections. This, then, is another example of the Opposition asking the public—hard-working taxpayers—to stump up for something that already works effectively.
The Minister raises an important point about the cost, and it is worth bearing it in mind that the Dutch Central Planning Bureau, which does this for nine political parties in Holland, has about 350 members of staff. Has the Treasury estimated how much it would cost to resource it properly?
I am not aware that we have done any estimates, but my hon. Friend is absolutely right about the Dutch Central Planning Bureau—the figure I have is 170, but he says 350—and the American Congressional Budget Office has 250 members of staff. The point is that the Opposition are asking hard-working taxpayers to pay more money to staff up the OBR quickly so that it can certify and sign off their economic plan, such as it is.
“As experience in the Netherlands shows, such a system has helped improve the quality of policies and encourages a more informed public debate as parties become more open about the costs of their proposals.”
What is wrong with that?
I will come to the overall principle of having the OBR look at parties’ manifestos, but how long has it taken the Dutch Central Planning Bureau to get to that stage? If the hon. Gentleman has the answer, I would be interested to hear it.
Thirdly, there are genuine practical considerations that must be weighed in the balance. The Opposition do not seem to acknowledge that rather than producing costings of Government policies, the OBR certifies the costings already produced. The OBR, which currently employs only 19 members of staff, plus three members of the Budget Responsibility Committee, would need significant additional resources and a range of specialist skills in order to take on such a role. Have the Opposition considered where it would recruit from?
I am grateful to the right hon. Lady for giving way. I have discussed every issue she has raised with the head of the OBR, whose view is that they do not provide a reason not to proceed, so long as the Government support the proposal. The Minister is setting out why she and the Government do not support it, but they should not hide behind the head of the OBR. He is happy to proceed; it is she who is blocking it.
As far as Government Members are aware, the letter of
I spoke to the head of the OBR last Friday, in preparation for this debate. The right hon. Lady, who has stepped in for the Chancellor, is quoting a letter from January. Surely, to prepare for this debate, she would have spoken to the OBR in the days before. If he has changed his views since last Friday and contradicts what he told me then, I will withdraw my comments. Did the Minister speak to him; is he content to proceed, or has she not bothered to have the conversation?
It is not a question of not bothering to have the conversation. If the right hon. Gentleman has had a conversation, where is the transcript and why has it not been released to the House? If he has a transcript, we would like to see it. We would like to know what the head of the OBR said about—[Interruption.] If I allow the shadow Chancellor to stand up again, will he tell us how many additional staff the head of the OBR said he would need to recruit, where he is going to find them from and how quickly they can be appointed? That is the premise of the right hon. Gentleman’s argument.
Is the right hon. Lady really saying that I am misleading the House? I spoke to the head of the OBR last Friday, and he said to me that if the Government agree by the end of June, we can proceed and these obstacles can be overcome. In his view, the issues that the Minister is raising about resourcing and independence can all be resolved if she chooses to do so. Is she really saying that I am misleading—[Interruption.]
Thank you, Madam Deputy Speaker.
We are back to old social government: no notes, no transcript, nothing. If the right hon. Gentleman has exchanged correspondence or if he has a transcript of the conversation, he should put it before the House if he wants to bring it into the debate.
I prefer to take notice of comments that are on the record, such as the following from Robert Chote. On
“The Chancellor perfectly reasonably has said he doesn’t think this is the right time to do this… The reasons he has cited are it’s the first general election we’ve existed…you don’t want to throw the OBR as a relatively young body into a politically contested territory now.”
The hon. Gentleman should make his intervention and ignore anything else, rather than trying to answer it all. A brief intervention will do, Mr Rutley.
Is my right hon. Friend aware that Mr Chote also made it very clear that his job would be made additionally complicated by the run-up to a general election? Is she surprised that the shadow Chancellor comes here to present his views with no form of back-up, official record, transcripts or anything on which this House might properly rely?
I am grateful to the Minister for giving way yet again; she is giving up a great deal of her time. Robert Chote appeared before the Treasury Committee, and, while he did say that if he were pressured to an unbelievable extent the work would be possible, he made very clear that he was not happy with the idea of having to press it too quickly. Moreover, the resources required would be astronomical, and it would be made up of temporary members of staff—
Order. Interventions are not opportunities for speeches. They are supposed to be brief, and Members in all parts of the House should adhere to that convention.
Both my hon. Friend David Rutley and the member of the Treasury Committee, my hon. Friend Mark Garnier, have eloquently described the reservations expressed to the Committee by the head of the OBR. On page 7 of his letter of
“Resource constraints in the OBR and responsible departments would argue for a longer process than that undertaken ahead of Budgets and Autumn Statements, so proposals might be required two or three months ahead of manifesto publication.”
Mr Chote went on to say:
“a May election date with April manifesto publications would imply that the work of certifying manifesto costings would need to be undertaken alongside the Budget and preceding Autumn Statement, when the OBR and responsible departments are at or near their peak workloads.”
In that part of the letter, he was referring mostly to resources.
I spoke to the head of the OBR. He believes that if he is to cost manifestos in time, he will need to start in the autumn, he will need agreement by the end of June, and he will need the details to have been worked out by the end of August. The Minister is obfuscating. It is she who is blocking this, not the head of the OBR.
Let me say for the last time that if the right hon. Gentleman wanted to pray in aid evidence from a conversation that he had last week, he should have put it in writing and presented it to the House, or placed it in the Library.
If we ask the OBR to recruit additional staff, what will they do between elections? I do not know whether Labour Members have considered the fact that what they propose would involve a radical change in the rules governing civil service contact with the Opposition. I do not know whether they have fully explored the primary legislation that would be required to make this happen, just as I do not know whether they have considered how the demands of Opposition parties would be balanced against other Government priorities.
I am extremely grateful to my right hon. Friend for giving way, because I think that the shadow Chancellor has just proved the Government’s case. These references to private conversations are politicising the OBR in exactly the way that frightens the Government. I think that the shadow Chancellor is hoist with his own petard.
As always, my hon. Friend has summed up the position brilliantly and eloquently. I was particularly impressed when he intervened on the shadow Chancellor and forced him to admit that the purpose of the Opposition’s proposal was to stop the shadow Cabinet making spending commitments left right and centre.
I was referring to other Government priorities. I am thinking of, for example, Budget preparations. The time when those preparations are being made is one of the busiest times of the year for the OBR, during which specialist and other staff resources are already occupied.
As I have already said today, what I will not do is stand here and say that the problems are insurmountable, or that a solution could not be found in future. However, if we want to ensure that the OBR’s independence and influence are preserved, the issue merits much fuller and much more careful consideration than is represented by the Opposition’s proposals. That brings me to one of the most important points. We need to remember that the OBR is a very young organisation. We believe that it is doing an excellent job—as, clearly, does the shadow Chancellor—but it has not, as yet, been subject to any major review.
It was announced in last year’s autumn statement that, as required by legislation, the OBR would launch an external review of its publications during the current year, and that its findings would be published in September. The Government have also announced that following the outcome of that review, and following the general election, they will hold their own review of the OBR. I think—I am sure other Members will agree—that until those reviews of the OBR’s current responsibilities have been completed, we should not throw extra responsibilities at it. I consider it sensible for us to wait until after the OBR’s review, our review, and the OBR’s first general election before considering this issue further.
Unlike the Labour party, I do not want to pre-empt the OBR’s review, but I think it safe to say that, through its creation, the coalition has changed the way in which Budgets are made for ever and has created an independent office that has restored public confidence in the numbers that underpin the Budget. In its first four years, the OBR’s independent forecasts have supported the credibility of our long-term fiscal plans. Between now and the general election, the OBR should remain focused on doing that job. It should remain focused on ensuring that, as we fix the mess left to us by the Labour party, the numbers underlying our long-term economic plan are correct. That plan is making a real difference.
Inflation is at its lowest level in four and a half years. Employment is at its highest level ever. Just as our deficit is shrinking, our economy is growing, with the recovery balanced across all the main sectors, because of a long-term economic plan being taken forward by the Government and being properly scrutinised by an independent, impartial body. That is how it should stay for the next year. That is why I ask hon. Members to support our amendment.
Perhaps it would be correct for me to state at the outset that, in view of the six-minute limit, I do not intend to take any interventions. I hope to confine myself to fewer than six minutes. I will not take an intervention, even from Jesse Norman, whose interventions so far have been a waste of time. Time is at a premium. On that basis, I will make some progress.
I do not think that I have heard a more blatant party political set of arguments, electorally inspired, from any Government since I have been in the House. The Government are going against the grain—
No, I am not giving way. I have made that clear already, although not out of any fear of what the hon. Gentleman might say. The Government are afraid, though. They are afraid that, if our proposals before the election were properly and independently costed, as they will be—we will probably try to get it done independently in some other way if we have to—it would give them the credibility that the Government seek to deny them by being misleading and by obfuscating, at which they are experts—the Chancellor in particular, who is not here.
When we look at what individuals have said about the proposal, it is clear that it is possible—no one has tried harder to secure this than my right hon. Friend Ed Balls, the shadow Chancellor—to achieve consensus across the House if right hon. and hon. Members on the Government Benches want it. Mr Tyrie, who chairs the Treasury Committee, said on
“I made clear in the Commons that this should include examining, at their request, the fiscal policies of opposition parties at election time.”
The whole point is that election time and the run-up to the election is the appropriate time to do this. That is why my right hon. Friend started this in October—nine months ago. It is a complicated, difficult process, but why have we had nothing from the Chancellor since? Why has he refused to engage in that?
Curiously for an Opposition day debate, a bit of consensus seems to be emerging that at least in principle this work should be done, but does the hon. Gentleman agree that, although of course the work needs to be done at election time, the preparatory discussions to discover what the ground rules should be need to take place in a quiet political climate, not in the run-up to a general election? Therefore, given that for three years both parties have objected to this, the time to get that done would be immediately after a general election.
The most useful thing I can do for the hon. Gentleman and the House is to read out in full, to get it on the record, what the head of the OBR has said. In March, just a couple of months ago, he said:
“I think the key thing that you would need to do would be to ensure that by, say, the early summer”— exactly where we are now—
“you were in a position”— he is speaking to Members who are involved in the decision—
“where even if you did not have the full legislative framework for this sort of thing in place”—
I think we have that, largely—
“you would need to have, first, agreement in principle across the parties”,
which we are striving for, and it is only because the Government perceive it to be against their electoral interests that they are resisting it. It is the most blatant, obvious Government ploy that I have seen since—well, I will not say since when. He said
“that it was a good idea to do it and, secondly, fairly detailed agreement on what you might think of as the rules of the game: which parties should be involved”— my right hon. Friend dealt with that—
“what scope of policies should you look at; what is the timetable; what would be the involvement of civil servants, and so on.”
The quotation continues:
“I think you would need to get that sort of thing in place in the early summer in order for us, for example, to be able to set out and recruit the necessary people over the course of the summer and have all that in place ready to be welcoming customers, so to speak, maybe after the party conferences in the autumn.”
There is timetable, therefore, but Government Back Benchers are trying to deny it, and they are not playing their role at all. Why are they doing it? There is only one reason, and I shall come back to it in a moment.
I am not giving way.
I was quoting comments made by Robert Chote on
Why do the Government not want it to happen? Let me read what the Chancellor said a couple of years ago when he first set out on this path:
“and it would be a legitimate matter for the House to debate”,
which we are doing today,
“and decide.”—[Hansard, 12 October 2010; Vol. 516, c. 142.]
I say, with no disrespect to the two distinguished Ministers on the Treasury Bench, the Exchequer Secretary and the Financial Secretary, that it is a matter of great regret that the Chancellor and the Chief Secretary are absent because, having promised that, the Chancellor has refused to engage with my right hon. Friend the shadow Chancellor. He has refused to come to the House and debate this with us on the one occasion when we can decide on it, and decide on doing it in the run-up to the election, which is the appropriate time, as Robert Chote himself said: I am reciting his words not in the quotation that I read out, but in another one.
It is quite clear that this can be done, therefore; Robert Chote has said that it can be done. It is quite clear that the only art left to the Government is sophistry to try to create problems that just do not exist. If they can answer any one of the charges—any of the points made by Robert Chote or my right hon. Friend—then let us hear them, because I say, with great respect to the Financial Secretary who opened the debate, that she did not tackle any of that. She said, “Let me put on the record what we inherited.” This is not about that at all, and it is not about the fact we were not satisfied with the OBR in the early years. I was the Member who was most critical of its ability in those years.
The fact is that the OBR is established now, however, and it is clear from Robert Chote’s comments that he wants to do this. He believes he can do it and he thinks it would be good. It would be good for public debate, for transparency and for politics in this country, yet the Government are denying the public that right and that opportunity to submit parties’ proposals, which are always in the centre of the election debate, for scrutiny. They are denying the public that, and the public will ask why the Government are doing that and they will read between the lines and see that it is a blatant, deliberate attempt to hide from the public the fact that the Labour party’s proposals are coherent, costed and convincing.
I want to bring a different point of view to this debate, and a point of principle. I am against this motion in principle, and I hope to clearly set out why. First, however, may I gently say that if I were compiling a list of colleagues in this House who had the skills-mix to bring together a cross-party consensus, I am not sure the shadow Chancellor would be top of my list, in the same way as I would not want to invite King Herod to babysit my children. [Interruption.] I apologise if that is a little harsh, but that idea did not ring true on the Government Benches.
This debate is about restoring the British electorate’s lost credibility and trust in the political classes, and certainly after our disastrous decision—as I now see it—in 2003 to go to war on a false premise, and after the expenses scandal of 2009, there is no doubt that credibility and trust do need to be restored. I have to say that I do not think this motion is the way to do it, however, because we will never restore trust in ourselves if we are constantly contracting-out to a third party our credibility and integrity. If we are not careful, we will simply become elected go-betweens buying in ideas and policies from independent sources. We have to build up a track record of trustworthiness in our own right.
The message the motion sends to the British electorate is that we do not trust ourselves in the run-up to next May’s elections to tell them the truth about our financial plans. That is what we are saying; the message we are sending out is that we do not trust ourselves. If we do not trust ourselves to send out a message of credibility and integrity, why on earth should we expect the electorate to have any trust in us? We may have access to the finest brains in the country, who can help to shape our spending plans; none the less, we still cannot be trusted to ensure that those plans are accurate, so we have to get them independently verified. The motion edges us towards accepting that nobody can ever trust a politician on anything without independent verification. I do not want to go there. That is a very slippery slope that I do not want to go down.
The trouble with subcontracting out to independent organisations is that it undermines the very essence of our democracy: accountability. If my electorate do not like me, they can remove me. They might well do so next May—we will see—but at least I am accountable to them. I am afraid that the OBR is not accountable to them. So the answer to the lack of trust in British politics is not to subcontract out our veracity. The answer—it will take a lot of hard work—is simply to tell the truth and stick with it; to make promises and keep them; to check our figures again and again before we set them out, and to make sure they are accurate.
I am listening intently to the hon. Gentleman. He is saying that the House should not subcontract out; is he saying the same of the Government? If he is saying to the Opposition parties that the OBR cannot vet economic policies, presumably, the same goes for the Government. Is he confirming, therefore, that he would do away with the OBR?
I was about to make the point that I hope the OBR will be only a temporary institution. I am probably the only person who thinks that. I was first elected to this House in 1992—not a million years after when the hon. Gentleman was first elected—and my recollection is that, 22 years ago, Treasury figures were trusted and taken almost as gospel. I am not pinning the blame on any particular Government, but the history of certain previous Governments massaging figures and forecasts and announcing the same money over and over again as though it was new money has completely undermined confidence in Treasury forecasts and credibility. Of course, we have also had the 2007-08 crash.
There is no doubt that the OBR has helped to restore confidence in and the credibility of Treasury figures, not among our electorate, most of whom have never heard of it—they would not know what it was if it hit them in the face—but among opinion-formers and commentators. However, I hope that it is a temporary solution and that we can in due course work our way back to good old-fashioned professional Treasury trustworthiness, like welcoming back an old friend.
The second reason why I will oppose the motion is that doing this right now would probably mess up the OBR. Changing its mandate would undermine the important work it is already carrying out. Other experienced groups—the Institute for Fiscal Studies and the Institute of Economic Affairs—pore over our manifestos in the run-up to an election, and they will communicate their findings to the electorate, as they always have done. Why not ask this question? Why stop at the OBR and our financial plans? If we are to subcontract out our veracity, why stop there? Why not ask the Electoral Commission to verify our constitutional proposals? Why not invite NHS England to review our health policies? Why not invite the United Nations to oversee the section in our manifestos on foreign policy? Where will all this end? There is no point in continuing down this road, unless we are saying that although we are elected to do a certain job—to take decisions and to make ourselves accountable to the electorate for the promises we make and the decisions we take—we do not wish to do it any longer.
If I am saying that this is not the right way to restore lost confidence and trust, what is? Most of us recognise over our lifetimes that when a reputation is lost, it takes a long time to put it right and a long period of penance. But there is no short-cut: it is about doing the right thing and sticking with it. In our case, it is about saying one thing and doing it: delivering on our promises, testing our figures before we release them—transparency is the key to this—collectively showing our workings and not just the end policy. There is no short-cut. We have to slog our way back to respectability.
I understand the reasons behind the motion, but I really believe that it is ill-conceived and would not help us to restore credibility and lost trust and confidence among the British electorate.
I have been listening to the debate and I really do wonder what the Government are afraid of. We are talking about the democratic process. The most important people in this debate are the general public: the people who vote. What can possibly be wrong with making them better informed about the economic policies of the parties that would be in government? Opposition Members hear a lot from the Government about economic policy and the “long-term economic plan”. The Minister mentioned it four times in her speech—she may be reprimanded for not mentioning it enough. That is more than a hint about what is going to be at the heart of the debate at the next general election; we know that the economy is going to feature prominently. We also know that many people find the economic arguments put forward during an election period very complex. Some people like bits from one side and bits from the other side of the argument. They may like the idea of tax cuts but prefer their public services to be kept intact. They may like the idea of a national insurance reduction but they love their national health service. So how do they decide who is telling the truth and whose sums add up?
The Tories have been making outrageous claims about Labour’s spending commitments. We say that they are misleading people, and to prove it we are prepared to put our proposals to an independent audit by the OBR in order to say whether or not the sums add up. That is the simple element of this argument. The crux of it is: are the Government prepared to put their economic policies to an independent audit so that they can be put before the public at an election and the public can be better informed when they make up their minds? The time has come for the major parties, particularly those that might wish to take part in television debates and be taken seriously, to have their proposals independently audited by the OBR.
The OBR scrutinises Government tax policies and expenditure policies on behalf of the public, so why would we not do this for would-be Governments when there is a general election? Surely the public have a right to be as well informed as possible. The chair of the OBR agrees with that. In his letter to the Chair of the Treasury Committee, he said:
“As we have discussed, I believe that independent scrutiny of pre-election policy proposals could contribute to better policy making, to a more informed public debate, and could help facilitate coalition formation when party programmes need to be reconciled.”
So he is clear that considerable benefits would come from going through this process.
No, I am trying to be disciplined because I have been in here too many times when people have taken loads of interventions and others have not had a chance to speak.
The Government have had plenty of time to have meetings about this issue over a long period of time. We have challenged Ministers about this, asking whether they have discussed it during any meetings. They have said in the past that they are committed to audits, so it is extraordinary that the Government cannot refer to any meeting where they have discussed this issue with the chairman of the OBR. That is an absolute disgrace; this is about having a better informed debate at a general election and they should be ashamed of themselves. Clearly, they have completely ignored this issue because they do not want to go through the process. As for the arguments about specialist skills, the chairman of the OBR is saying that he can deliver on this if we can get an agreement in principle now and if we can start to go through the details by the end of the summer. He is the first person we would go to if we were trying to set this up, so if he is saying—
I will not give way, and I have explained why. If the chair of the OBR is saying, “I can do this if you make this decision now”, who is to question that? It should not be the Government, who have an ulterior motive in not having their economic policies and, more importantly, the misinformation they put out about their opponents scrutinised. If the Opposition’s budgets were examined, the Government would no longer be able to misinform people about those budgets. That is the truth of why the Government are ducking out of this. It is incredible for the Minister to stand there as an elected Member in this House and question the veracity of evidence that has been given to the Select Committee. The chairman of the OBR has been before the Select Committee and clearly indicated that he is favour of the proposal, and that has been questioned in this House. I find that absolutely incredible. It just shows us how much the Tory Government are wriggling on a hook to try to weasel out of this proposal.
The public will make up their own minds from a better informed position if we were to take this proposal forward. Only a Government who is up to no good could oppose the proposal. The time has come for this proposal to be taken forward, the OBR should be given the legal power to audit our plans, and the Government should get out of the way and allow it to happen.
The Government are absolutely right to be cautious about allowing the Office for Budgetary Responsibility to be caught in the middle of a political trap. The virtue of the OBR is its political impartiality. It was wonderful to hear the shadow Chancellor—it is always wonderful to hear the shadow Chancellor in his marvellous speeches—explaining how cross-party he was. I looked up a quotation in which he said how terrible it was to brief against fellow MPs. He said that it was snake-like politics in which he would never indulge. That created a wonderful image of him as this purer-than-the-driven-snow gentlemanly creature who would never indulge in underhand party politics and who solely has the national interest at heart. How maligned he must feel when he reads newspapers that sometimes suggest otherwise. It is one of the great tragedies of modern politics that that should be allowed.
Unfortunately, underlying the shadow Chancellor’s speech was sheer party politics. The OBR is there to deal with that which is entirely governmental: that is to say with the Budget, which is passed through a Finance Bill that is a matter of fact, and with an autumn statement that also deals with facts. Against that, we have a series of promises, propositions and theories that do not come out at two clear points of the year, but dribble out, sometimes in draughty halls in obscure parts of the country, as shadow Ministers go off and make spending commitments to meet the latest demand of a newspaper article or a difficult question asked by a journalist. Depending on who we ask, the bankers’ bonus tax has been spent 11 times.
My hon. Friend is a great wordsmith, but I want to lance the boil of what the Opposition keep saying. The OBR is not in favour of the proposal. The OBR used the word “could”.; it said not “it would”, but “it could”. It is the word “could” that is of importance here, and the OBR has not supported what the Opposition are saying.
My hon. Friend is extremely wise in his observation. The OBR, which is a non-party political body, has said in response to a request from the shadow Chancellor, a man of the greatest dignity who should be taken seriously by Members from all parts of the House, that if that is the will of Parliament, it will do it.
I shall test the hon. Gentleman’s support for my integrity. In March, the head of the OBR told the Select Committee that if the proposal was agreed across parties by early summer, he would be content to proceed, which he confirmed to me last Friday. Is the hon. Gentleman, unlike the Minister, content to accept my word that the views of the head of the OBR in March are still the same today?
Thank you, Madam Deputy Speaker. Of course I accept the shadow Chancellor’s word without question, but it is a conditional. If there were cross-party support, then a statutory body would do what a statute required of it. That is the simplest expression of the constitutional position that would apply to any statutory body. The idea that a statutory body would say, “If the whole of Parliament tells us to do something, we will blow a raspberry,” is so absurd as to be a point beneath the dignity of the right hon. Gentleman, who is far too clever to make so childish a point.
So let us come back to the real issue, the real curse of asking the OBR to do this. The spending plans of the Opposition are moveable feasts. They vary as circumstances vary. When I challenged the right hon. Gentleman, I thought the first part of his answer may have had some truth in it—that he wanted to be in absolute charge of where his party was. That may be the case, not only for him but for all shadow Chancellors at all times, and not just shadow Chancellors but whoever is responsible for economic policy among the Liberal Democrats, which is even more debatable than who is in charge in the Labour party. I am not entirely sure whether it is the President of the Board of Trade or the Chief Secretary to the Treasury; I am not sure that the Lib Dems have decided, or, if they have decided, whether this has been accepted by the brethren.
A number of people make spending promises. If we ask the OBR to audit them, we make the OBR a matter of political debate because it would be approving expenditure promises that would not necessarily be part of the Budget if the party making them were elected. Are you to say, Madam Deputy Speaker, that only promises made by a shadow Chancellor count? Are you to exclude the leader of the party, who has recently made certain promises to reform the benefit system? Or should you do it on the basis of GP appointments, which the leader has promised will occur within 48 hours? Has this been approved by the shadow Chancellor? Is it official policy or was it the whim of the Leader of the Opposition when he was caught out in a television studio? How are we to know? Are you so to restrict the shadow Work and Pensions Secretary or Education Secretary when they make statements? The shadow Chancellor is nodding. Perhaps this is not the bipartisan approach that we were led to believe in during his marvellous speech but a power grab by the right hon. Gentleman within his own party.
This House of Commons, this noble House, this honourable House, is debating whether Ed Balls should be in charge of the Labour party. This is really a debate about his leadership ambitions. They may be a good thing. Members of the Labour party ought to decide that, better than I possibly could. [Interruption.] I am grateful for the support. I do not know whether I would get many votes if I stood for leader of the Labour party, but never mind.
I don’t think they are that desperate yet, although the time may come.
The nature of opposition—and it is as true of Conservatives in opposition as it is of socialists—is that the pressure of events means that spending commitments and taxation commitments change. Oppositions are not in command of events, so the proposals that they make cannot be as solid as those enunciated by a Government. That would fatally undermine the position of the OBR because it would be dealing with day-to-day political controversy, and inherent in forecasting is the inaccuracy of forecasting. The OBR is respected more because it is independent than because it is right. Few economists manage to make forecasts more than one year out with any consistent accuracy, so the idea that the OBR were giving an imprimatur or even for that matter a nihil obstat to Opposition policies would create false certainty. It would politicise the OBR and it would have the sole advantage of making the right hon. Gentleman leader of the Labour party.
Before Members make their address, they should answer this question for the general public to hear—do they agree to use the OBR to examine the tax and spending policies of the major political parties? If Members are against that, they should tell the public. That is seen by the OBR, the Treasury Committee and the House as the main purpose of the exercise. Mr Streeter said he would do away with the OBR, but that is what the OBR does for the Government. If Members are moved by the non-existent Chancellor and the speeches from the Government Front Bench, they should ask what they are being talked into. They are being talked into reducing the ability of the general public to take informed decisions on the economic policies of the political parties—all political parties—at general election time.
My hon. Friend is speaking with his typical eloquence. Is it not the case that for all the arguments that we have heard about what Mr Chote may or may not have said and all the arguments about timing and what Bills can or cannot be brought before Parliament, Tory Front Benchers do not want the proposal to be implemented because they put Tory party interest ahead of the national interest?
I follow my right hon. Friend the shadow Chancellor in not wishing to inflame matters or become party political. We are speaking about an issue that is very important to the general public and a first step to giving Back-Bench Members an input into Budgets, as the Americans, the Dutch and other Parliaments do, whereas we are simply used as voting fodder when a Chancellor presents a Budget. This is a first step and it is an important step.
It is outrageous that we are turning the motion down to protect the OBR. Members should not allow the Government to hide behind the OBR or to besmirch and lessen the reputation of Robert Chote. Robert Chote and his colleagues have carried out extremely important work. Their forecasts are not always right, but they make them sincerely and within the finite probabilities. The OBR is a very important institution. When it was first established, I thought the Chancellor had taken an extremely significant step, though not a big enough one.
Sadly, the Minister and some of my colleagues on the Treasury Committee have taken quotes out of Robert Chote’s letter of January and the minutes of the March meeting of the Treasury Committee. That should not be done. Robert Chote was asked by the distinguished Chairman of the Select Committee:
“Can I begin by asking you, do you in principle support the OBR having a role in the costing of political parties’ manifestos in the run-up to an election?”
Robert Chote replied:
“Yes, I do.”
He went on to say that this route
“does offer the prospect of improving the quality of policy development for individual parties and it potentially improves the quality of public debate in the run-up to an election”.
The Chairman, putting his finger on the real issue, which is time, asked Mr Chote:
“Do you think that you could get this job done between now and the general election?”
Mr Chote replied:
“It would be difficult but by no means impossible” and he spelled out that the decisions to enable the OBR to do that must be taken by this summer.
No. I shall finish my point. I have quoted what Mr Chote said, but Back-Bench Members do not necessarily have a full picture of all the details and discussions that have gone on. For the Minister to say to the shadow Chancellor, “I will only believe this if you put it in writing” is quite disgraceful.
Twice, to my knowledge, Robert Chote was asked in the Committee whether he wanted to go ahead with this idea, whether he thinks it would harm his reputation and whether he has time to do it before the election—we have gone through the whole gamut—and the answer on each occasion was yes.
The Minister used the word “insuperable”, which she got from Robert Chote’s January letter, but Mr Chote did not say that the problem was insuperable: he said that the issues that she has spelt out “are certainly not insuperable”. The distinguished Chair of the Treasury Committee lured out of Robert Chote the information that tells us what is going on. He said:
“As you know, Mr Chote, I have been very keen on this idea for 20 years”,
and that was accepted; he has been. He then said:
“Have you…spoken to the Chancellor” on this, and Robert Chote said that he had, but the Chancellor was not in favour of it for this or that reason. But then—and this goes to the core of why we have a space on the Treasury Bench—the Chair said:
“Given my enthusiasm for this idea, George’s position has been consistent but always unsupportive.”
We are not talking about there being no time to do it this year; the Chancellor of the Exchequer does not want it to happen, full stop. In other words, he does not want the public to go into a general election having the full, objective, independent assessment of all the political parties’ economic policies, and that is a disgrace.
Knowing that every poll, every doorstep inquiry in May, and every e-mail that I get shows that the public feel unable fully to trust Labour with the economy, and knowing that the OBR believes it would be difficult and time consuming at the moment to do what the shadow Chancellor proposes, I hope that it is not the shadow Chancellor’s sole concern today to bolster his uncertain economic credibility.
I understand that the shadow Chancellor likes to copy eminently sensible Lib Dem policies such as the mansion tax, the fact that we published the costs and savings on our proposals in 2010—for example, showing how we would afford our eminently sensible increase in the tax allowance—
I do not know those details. I will take the hon. Gentleman’s word for it that they have been rubbished, but I personally support an increase in the tax allowance, so that no one on the minimum wage would pay any income tax. It seems silly to me to have a minimum wage and then charge people tax on it. But that is my opinion, of course.
I also agree with the Chief Secretary, who unfortunately is not here today, that auditing manifestos is well worth further consideration. But as the OBR said, although possible it would be difficult to do in a timely and sensible fashion before the next election. I remember that in 1997 Mr Brown successfully persuaded the electorate of his prudence. Despite this latest attempt to do so, I feel that Ed Balls will not follow in his right hon. Friend’s footsteps, so let us commit ourselves to honestly publishing proper and well worked out costings for the proposals of all parties in the House, doing it ourselves, and spending the money ourselves, but follow that up—
I am sorry; I did not realise the hon. Gentleman was coming to an end, but I thank him for giving way. In the context of the competitive and confrontational elections that we have, where Opposition policies are always rubbished and called into question, does the hon. Gentleman think there is a role for an independent, credible organisation at least to shed some light on those policy proposals?
The IFS costed our proposals in 2010, and that is an eminently sensible approach. It can be argued, however, that the OBR is seen as very successful. I am glad that now all parties, instead of just one, think that it is a useful independent organisation.
We should look to do this after the next general election, when the OBR will have plenty of time and resources to do it properly without having to rush the job and hire people quickly. As we have noticed from what is happening to our IT today, when one tries to rush something and does not do it properly, it does not work properly. I commend the idea and philosophy to the House, but this needs to wait until after the next general election.
Having listened to this debate, there seems to be confusion, or perhaps a conflict of views, on the part of Government Members. Mr Streeter was at least consistent in his position, which was not that it is a bad time to do this but that it is a bad idea altogether. Indeed, he did not seem to be all that keen on having an OBR at all. The position of Government Front Benchers, not just today but when this has been raised before, has generally been to say, “Yes, it probably could be quite a good idea and it should be done at some point in the future”—it is always “at some point in the future”. Those two positions do not hold together.
A lot of the reasons that have been given for not doing this now do not stand up to scrutiny. The Minister told us that it is a difficult time of year because it would run into the autumn statement and the Budget. If we are going to continue to have fixed-term Parliaments with May general elections, that will be a problem every single time, not just now. Another argument is that it is too difficult because there is not enough time to recruit people and get something like this off the ground. When the OBR was set up on an interim basis, it got off the ground very quickly. We were told, even at that stage, that we should accept its ability to produce a report, as it did in advance of the emergency Budget in 2010, that was a good and credible piece of work. That happened between May and June. The arguments about there not being enough time to get people in place do not stand up.
Much as I always enjoy the mellifluous tones of Jacob Rees-Mogg, who can get carried away with his own rhetoric, what he said was not correct. He suggested that we would be asking the OBR to look at every single proposal that came up over a period of time and any changes to it. That is not what the motion says. It asks for the auditing of proposals included as part of a general election manifesto. That is not the same as looking at policies that may change because there has been further debate or, as he suggested, through force of circumstance because there are changes out there in the real economy. By the time we are coming to the eve of an election, parties will be producing manifestos with specific proposals. Some of the things that have been debated and proposed by Labour will make it into the manifesto, while perhaps some will not. It is important that those proposals are audited so that there can be some judgment on them.
Despite all the protestations we have heard from the Government Benches about how the OBR must in no way be compromised or brought into the political fray, I have no doubt that as we get closer to the general election campaign, if we are not already in it, we will hear Government spokespeople say, “The OBR says this”, “The OBR says that” or “The OBR has audited our figures.” On that basis the OBR will already have been brought into the political fray, so why not do it properly and have it audit the manifestos of the parties that can form a Government? If Government Members do indeed think that that is a good idea in principle, let us just get on with it.
Order. The time remaining for contributions to this debate is very tight. In order to ensure that all Members who wish to speak can contribute, it is necessary to reduce the time limit to five minutes. I hope that it will not be necessary to reduce it further, but that will depend on interventions.
I speak in part as a member of the Treasury Committee and as a member of the council of the National Institute for Economic and Social Research and a senior fellow of Policy Exchange.
One of the tragedies of modern politics is that so many issues are no longer discussed soberly and on their merits but are viewed purely through the prism of party politics. The present subject of debate—whether, and if so how, manifesto policies should be costed by the OBR—is one of potentially great importance that could shape political debate across many years and many future Parliaments.
The shadow Chancellor, who is no longer in his place, despite his strictures about the Government Benches, has attempted to politicise this debate and drag Robert Chote’s name into it. Let us simply say that expert opinion on the issue is divided. The Institute for Government has described the pre-election timing as “hasty”, and the IFS has questioned the very idea of the OBR undertaking this role. As I will show, there are several crucial issues of principle as well as practice. They must be addressed before legislation can be considered.
First, there are practical matters of funding and staffing. Let us not forget that the motion states that manifestos should be costed. Manifestos are very long and their policies are often described very briefly and vaguely, so there would be an enormous amount of work. When Mr Chote and others appear before the Treasury Committee, they refer to individual clusters of policy, not whole manifestos.
Is it not also significant that there is room for great interpretative range? There is a massive number of think-tanks and analysts out there who will all draw different conclusions. The idea that one entity could somehow create a reliable and completely authoritative conclusion about any single manifesto is totally unrealistic.
My hon. Friend is absolutely right, and I will move on to that point shortly.
The OBR is a new institution. Would it be right to put its recently created reputation at risk by inserting it into the political process in the run-up to an election? The answer is obviously no. These issues need to be calmly and soberly addressed, not patched together late in a Parliament. The proposal would require primary legislation, which will take time and consideration. It should not be rushed into on this timetable. The Institute for Government was perfectly clear that it should not be adopted as a hasty change to the OBR’s remit at this point in the Parliament.
The second question is this: would such a new role compromise the OBR’s key functions? There is an obvious danger that it might. The remit would require careful amendment. Clear rules would be needed on how many policies could be costed, if not a full manifesto, and on which political parties would be eligible. The OBR could not be expected to invigilate in hard cases or act as judge on these issues. It would undoubtedly be attacked by parties that were ineligible to have their policies costed.
My hon. Friend has referred two or three times to policies being “costed” by the OBR. In fact, the motion refers to auditing, which has a precise meaning. I think that is the weakness of the Opposition’s case. What does an audit opinion mean? It would be qualified, true and fair, and in reality there would be several caveats, which we would end up arguing about.
That very important point speaks better than I can to my hon. Friend’s expertise. I suspect what the Opposition mean is “costed,” so their failure to understand the difference is reason alone to reject the motion. “Costing” was the word used by the Treasury Committee and that is what I would call it, too.
There is some risk of bias against insurgent parties that were growing in public support but did not have many MPs, or in favour of declining parties for the opposite reasons.
I remind the House that there are deeper questions to be addressed. Is it actually possible to have all policies costed in a genuinely authoritative and independent way? The answer is far from clear. Many policies are non-financial, many are vague and many have complex interactions with other policies that may themselves not have been costed, and many have implied costs that will not be captured by a direct costing exercise. It may be that the OBR will not enjoy the relative immunity from political controversy enjoyed by the civil service when it ends up costing Government and Opposition policies. Parties may try to gain the OBR, as they have attempted to do in Holland.
My final question is this: is it wise for the state to be pushed further into the political process? My hon. Friend Mr Streeter has made this point, but let me reiterate it. It is a far bigger question than we have time to debate today, but just as there are perfectly proper concerns about the state being dragged into funding political parties or into press self-regulation, so there are proper concerns that the state should not be pulled into costing party policies. After all, parties have been producing policy ideas, themes and, indeed, platforms, if not manifestos, for more than 200 years, ever since the time of Burke, Fox and Pitt. The British public have found themselves able, mirabile dictu, to make judgments for that period, even without the wisdom of the Office for Budget Responsibility.
This very debate shows how this topic has already become bogged down by partisanship. Why does the Labour party now seek to have manifestos audited? The reason is that its polling data overwhelmingly demonstrates that Labour is hopelessly short of economic credibility. The shadow Chancellor himself is specifically responsible for—indeed, he incarnates—that lack of economic credibility. He was a key figure in the previous Government, who left our country so vulnerable to financial crisis. He had to be dragged kicking and screaming to accept his mistakes in office as a soft-touch regulating City Minister. He is still in denial over the success of plan A. The irony is that his performance on this very issue perfectly exemplifies the reasons for his diminishing authority: first, he was against costing policies, but now he is for it. For naked short-term advantage, he is prepared to politicise the OBR and its head, amid a lot of pious words about cross-party consensus from one of the most divisive figures in politics of the past two decades.
In conclusion, this is an important issue, but the shadow Chancellor embarrasses himself twice over: first, by placing it in such a party political context, and secondly, by ignoring the real problem for him, which is the catastrophic failure of trust in politicians and political parties today—a failure to which he himself has been no small contributor. The causes of that loss of trust have little to do with politics. They run much deeper to the decline in Britain’s influence around the world; the loss of standing of Parliament over so many recent scandals; feelings of powerlessness among the general public; an apparently increasing sense of outrage fanned by parts of the media; and a general unwillingness to grasp the complexity of Government or to give those in power the benefit of the doubt.
The time has passed when the shadow Chancellor could expect to be heard on this or any issue. He has thrown that right away. He has lost what authority he ever possessed. Today’s debate shows precisely why he will never, and should never, regain it.
Certainly not the last bit. Last month’s elections were a wake-up call for all of us, and if we do not heed it, the future of politics will not look good. Far too many people feel completely disfranchised from politics and do not trust politicians. Too many people either stayed at home or cast their vote for a protest party. That is why I fully support the motion for the OBR to independently audit the spending and tax commitments of the main political parties in next year’s general election.
Undertaking that analysis would be a major step forward to help increase openness and transparency in politics. It would enable proper scrutiny and debate on the spending plans of all political parties, and enhance the democratic process. Ultimately, it would contribute to informed decision making, which is surely what we should all want. We are here as public servants to reflect issues in our constituencies and to develop policies that respond to those issues. Communicating our policies is part of our job. That is certainly the form of politics that Opposition Members want to develop.
This proposal is part of a process of addressing the major power imbalances and associated inequalities in our country, and we are absolutely determined to tackle it. We will continue to stand up to powerful vested interests, from media barons to the big energy companies. Information is power, and having information about how the Government or political parties intend to spend public money is very powerful.
I am sorry, but I do not have time.
To deny information to the public is absolutely shameful, and that is where the problem lies. Other parties do not want to change; they want the status quo. They want to preside over a country where there is growing inequality. The average person will have £1,600 a year less in their pocket next year compared with 2010, and the average family has lost £974 since 2010 because of the tax and benefit changes, but bank bonuses have soared and the top-to-bottom pay ratio for FTSE 100 companies stands at 300:1. The Government are presiding over such inequalities.
If we propose policies, as the Leader of the Opposition did last week on the provision of training opportunities for young people, it is clearly important for the public to understand that the policies will cost what we say they will cost, and surely this proposal would help.
Absolutely. That is my major argument. I cannot understand any party not wanting to provide information to enable people to make informed decisions.
Why does the hon. Lady suppose that we did not have an office for budget responsibility during the 13 years of the previous Government to provide the very transparency and credibility that she is now so keen on?
I am very grateful that we have an OBR now, but we should focus on how we use it.
To return to the current and growing inequalities under this Government, recent research on life expectancy has shown that people in Manchester are twice as likely as people in Wokingham to die early, and the figures are getting worse. My right hon. Friend Frank Dobson famously said:
“Inequality in health is the worst inequality of all. There is no more serious inequality than knowing that you’ll die sooner because you’re badly off”.
That is what is happening under this Government.
This Government are grossly unfair and unjust: they protect their own self-interest, they are out of touch and they are out of time. Should we be elected in 2015, we have said that we will not borrow more for day-to-day spending. In stark contrast to this Government, our decisions on how we spend resources will be based on fairness, justice and evidence.
We want our spending plans to be independently verified to make sure that they are robust. After all, that is what happens not just in the US, but in Canada, Australia and the Netherlands. I invite those who wish to enhance the democratic process and not to stifle it, as well as those who want a Britain for the many and not for the few, to join us in the Aye Lobby.
I spent 13 years in opposition in this House, and I sat through several Budget speeches under the Labour Government. They were interesting, to say the least, because it usually took some weeks to find out, having read the small print, what they actually meant. At that time, we were told that boom and bust had been abolished. I very well remember the debate we had when it was revealed that the deficit was £164 billion.
This Government had a very tough economic inheritance. We would not be in coalition if we had not, because normally, the Liberal Democrats and the Conservatives enjoy fighting each other all the time, but the problems of the country were so damn serious that we had to get together to try to sort them out. That is the legacy of how the last Labour Government managed our economy.
One of the important things in 2010 was credibility. Confidence in the markets was very shaky, and the OBR was part of a range of policies that the Government introduced to add some degree of independence, so that people had more confidence in what the Government were going to do and in the figures and, indeed, so that the City and forecasters could see the direction of British policy. It was a limiting factor, because no longer could the Government adjust the growth factors or the tax take to show a rosier scenario, so that they could cut taxes. They had to live within the framework set by the OBR.
But I do not think the OBR is some kind of magic bullet. All forecasters are, by their nature, wrong. What we have seen throughout the last four years is forecasts from the OBR go up and go down with the economic cycle, and the Opposition, on many occasions, have accused us of having large deficits and putting up the national debt on the basis of OBR forecasts. As the economy is now growing and they are going the other way, no doubt we are praying in aid the OBR that things are getting better and we are getting on top of the problem.
The reality is that the OBR is a small body of public servants who do their best to give some independent credibility to Government policy. If I were to focus additional money or resources, it would be on having a few more people in the OBR rooting around in what our Government are doing, rather than in what the Opposition might do. Even today, when we look at budgets and financial statements, the reality is that there are still a lot of figures about tax avoidance and Swiss agreements to bring in more taxation that ought to be rooted around in by the OBR to see whether or not the Government forecasts are robust, because the OBR is dealing with matters of fact. It is dealing with the Government, with public spending and with how a country is being run.
I do not think that focusing on what the Opposition may or may not do is a terribly good way of spending money. Would it have been a good use of money for civil servants to spend a lot of time looking at what the leadership plans of my right hon. Friend
Is the other lesson not that in government, decisions are made as a consequence of actions that are being taken in other parts of the Government and, in fact, the costs of delivering some programmes are very different when those decisions have to be taken? Therefore, any judgment would be somewhat qualified.
Yes, and lots of assumptions would still have to be made. Clearly, my hon. Friend Mr Tyrie, the Chair of the Treasury Committee, made some very good points about ground rules that ought to be discussed in peace time. If this is an idea worth exploring, it is better to explore it in a relatively more peaceful political time post the 2015 election to see whether it has some merit.
I think that the greater benefit for public debate in this Chamber between the parties is a greater focus on what the Government are doing with their plans. That would give more information to the Opposition and Back Benchers to question and hold the Government to account, rather than focusing on the hypotheticals of what may or may not happen if, indeed, the Government change. Not least, if the focus is on manifestos—they come out in March before an election, at the last possible moment, so that there are nice surprises for the newspapers—how on earth could the OBR look at those and objectively give any kind of costing before the election?
Looking at the future programme, in the autumn, we have the autumn statement and all the spending plans. We are then immediately into the Budget, and just beyond that, we are into a general election. It is bad enough trying to predict what the Government are doing, let alone what the Labour party are trying to do at that time. As I said at the start of my speech, any kind of forecast is bound to be wrong, so the OBR would be wrong about what the Government are doing and wrong about what the Labour party is doing.
Might it be worth my hon. Friend sharing my view and correcting the record? The OBR was set up by transferring existing civil servants from the Treasury into a new entity. It is therefore not right to say that it was set up quickly and could therefore be expanded quickly. It already had those civil servants, which was why it was allowed to succeed and start so quickly. Growing it is an entirely separate matter.
Order. Before Mr Syms replies, I point out that Government interventions are having the consequence of talking out any Members who are still waiting to speak, and there are quite a number. We will start the wind-ups at 6.40 pm.
I conclude my contribution by saying that the OBR has a role. We should stick with its current role and perhaps look at changing it after the general election, but I do not think that this proposal has much merit. If it did have merit, would we be kicking it around on an Opposition day? I do not think so.
Let me start with Jacob Rees-Mogg. He is a very clever man—he went to public school, I believe—but he was being deliberately obtuse. As my hon. Friend Sheila Gilmore pointed out, the hon. Gentleman suggested in his intervention that somehow the OBR would have to take account of every possible nuance and potential spending commitment that a shadow Minister might make at an obscure public meeting in a village hall in some obscure little village, perhaps in North East Somerset. Perhaps he has not had time—he is a very busy man—to read the motion tabled by the Labour party, but as my hon. Friend the Member for Edinburgh East pointed out, we are asking the OBR to audit the manifesto, not inadvertent comments that may have been made off the cuff at an obscure meeting in a village hall in North East Somerset.
The Minister had the temerity—I will put it like that—to suggest that my right hon. Friend the shadow Chancellor was using this proposition as a fig leaf. How dare she! If anybody is responsible for indulging in trying to use a fig leaf, it is the Minister, the Chancellor of the Exchequer and the Government Front-Bench team. They suggested that somehow the OBR could not manage this proposal and that it would be unable to scrutinise things as an independent body. They said, “It is a new organisation, it is very young and it couldn’t quite manage it; let’s get the general election out of the way first.” However, members of the Treasury team know full well that our propositions are properly costed and would be doable. This is about the sort of country and society we want, and perhaps about the ideology and values that underpin Labour, compared with those that underpin the Government.
The truth—this is no coincidence—is that the Chancellor is not here because he is frightened. If I may quote the words of the late Margaret Thatcher, he is
“Afraid? Frightened? Frit? Could not take it? Cannot stand it?”—[Hansard, 19 April 1983; Vol. 41, c. 159.]
That would be especially so if the Labour proposition was actually subject to an independent audit by the OBR. That is the real reason why the Government are opposing the Labour motion.
Is this not also about wanting to maintain the status quo, and is it not revealing what that says about the Government and their political priorities?
Very much so. For all the great talk about a different approach to politics that the Prime Minister suggested he wanted to herald in, this is the very worst of the old politics.
Mr Streeter thought the proposal a bad idea in principle, but the British people deserve better than what they have had, and they certainly deserve better than what they get from the Conservatives. Routinely, what we see from Conservative Members, with their friends in the right-wing media, is a hysterical outpouring of misrepresentation of Labour manifesto proposals.
I remember Labour’s “double whammy” of tax and spend that the Conservatives used in 1992, and the VAT bombshell and all that nonsense, when we had actually gone to some lengths to be straight and honest with the British public and produce a shadow Budget. Yes, it was clear there would have been some tax increases, but they would have been for the richest people in society; eight out of 10 people would have benefited from Labour’s shadow Budget, but that was not what the Conservatives said or what was portrayed by the right-wing media. Had we had the opportunity of an independent audit of that shadow Budget, it would have been clear that the Conservatives were misrepresenting—or not, as the case might be—Labour’s proposals.
I understand why the Government are trying to resist the motion, but I want to see our proposals audited. On housing, for example, instead of giving billions of pounds to private landlords, it would be better value to invest that money in building houses for people. Surely, that would be a better use of money. It would be good—would it not?— for the OBR to scrutinise and audit that.
My hon. Friend is doing a great job of getting rid of some of the misrepresentations and nonsense that we talked about earlier. The shadow Chancellor made it clear earlier that he was proposing that the OBR would only provide independent scrutiny and certification of the policy costings of political parties with at least 5% of the seats in the House of Commons. That is an important point. We are not referring to every draughty hall or every party, however few seats it holds. Those points should be made clear, and I hope that he agrees that this shows that Government Members were just not listening.
I very much agree. It is pretty clear that Government Members have closed minds and closed ears. Nobody is so deaf as those who refuse to hear. It is an inconvenient truth—is it not?—that our proposal would take the partisanship out of election campaign to some extent and ensure that the British people get a clearer picture of the respective merits of the Conservative offer and of Conservative values. It is perfectly legitimate for the Conservatives to say, “We want to look after and enrich the wealthiest people in our country.” They are perfectly entitled to do that—perfectly entitled to impoverish the vast majority of people and force down wages—and we are perfectly entitled to propose our alternative.
We want to ensure that the vast majority of the British people—ordinary working people—actually benefit from the economic growth that, thankfully, we are seeing now, but most of the economic growth in the country today is going not into the pockets of ordinary people, but to the top 1% of society. I want to take away the opportunity for us to misrepresent each other’s policies and limit the opportunity for negative campaigning. A lot of people are turned off by negative campaigning, but it can be very effective. Our proposal would be a force for good. It is what the British people deserve, and the British people will make up their own minds if the Conservatives and their Liberal Democrat poodles vote against this motion tonight.
Order. I would like the Front-Bench winding-up speeches to begin at, or very close to, 6.40 pm. One hon. Member, with a stunning lack of self-regard, has just given way, in the interests of colleagues, both of whom I would like to accommodate.
I am grateful to you, Mr Speaker.
There are arguments in favour of the proposal and of doing it in time: it could help to ensure that only realistic proposals are put in front of the electorate; also—the shadow Chancellor made this point jokingly, but it is a serious one—within parties it could help to strengthen the hand of those seeking to impose fiscal discipline against those who wish to offer the earth, of whom his own party has more than its fair share; and it could open a dialogue early on between the OBR and a group that might soon be in government; but there is one big argument against it, and it was alluded to by my hon. Friend Jacob Rees-Mogg. I am talking about the danger of a false sense of security being attached to a party’s programme for government.
It is right, and it happens, that independent and respected organisations make appraisals of parties’ proposals. We need extreme caution, however, if we seek to institute a single gold-standard appraisal with a sort of state licensing behind it which could be attached to a manifesto. It would be extremely difficult for the organisation involved to avoid political controversy, and there would also be a danger of closing down further debate and additional scrutiny from elsewhere. With tax and spending, it is never as simple as saying, “Oh, cost the proposals” because behavioural assumptions are, of course, relevant as well.
When it comes to forecasting, J. K. Galbraith said there were two types of people:
“those who don’t know, and those who don’t know they don’t know”.
Fortunately, the OBR is in a group that knows it does not know, but unfortunately it has to deal with other people who have a hunger for simple binary answers and do not deal in “don’t knows”. Forecasting is a series of fan charts, an examination of assumptions, an appraisal of the risks and upsides—and, crucially, seeking ways to mitigate those risks. The media, however, will look for a simple yes or no, and we can bet that any party going through the process will find a way to say that the organisation concerned has said yes, which makes it dangerous. The OBR knows that, and it knows that it is a nuclear option to say “No, the official Opposition’s proposal for government does not get our seal of approval”. That is not a power it would use, so the implicit yes is not worth a huge amount either.
I am in favour of there being wider capability for analytical scrutiny of political parties’ proposals, and that could be done either through the OBR or through Parliament itself via the Select Committee system. To be reliable and to avoid politicisation, an institution should not be making forward-looking projections relating to individual proposals. They should be either backward looking or generic—backward looking in the sense of “what did happen with the changes to the top rate of income tax?” or generic in the sense of “what is the evidence from this country and around the world relating to elasticity of tax rates?” If such things are to happen, they should happen gradually, but it is very risky to have a single state-licensed, gold-standard approval mechanism for any party’s manifesto.
It is a pleasure to follow my hon. Friend Damian Hinds. It will be a surprise for Chris Williamson to know that I found a Conservative on a Select Committee who was actually in favour of Labour’s proposals. I refer to the Treasury Select Committee of 2010, which said in its fourth report of the Session:
At that time, then, there was a different viewpoint in the House. It is interesting that the shadow Chancellor has managed to develop a political consensus that now includes, but did not at the time, the viewpoint of the shadow Business Secretary when he was a member of the Treasury Select Committee. At the time, he and other Labour Members were opposed to this idea—for reasons I cannot possibly imagine, but I am sure they can speculate on that.
I would like to pose one or two questions suggesting why I think this proposition is completely unworkable at this stage of the Parliament, and why I think that if we are to have a serious debate about this topic, we should have it in the next Parliament. My first question is: who will qualify for appraisal by this type of process? The shadow Chancellor has said that it would include the main political parties and those that have more than 5% of the seats in the House of Commons—not a completely unreasonable proposition. As we know in connection with the debate we hope to have in the run-up to the general election, other parties, including some who polled reasonably well in the European elections, feel that they should be involved in those debates. They would come forward and argue—probably quite powerfully—that they should be allowed to do so. I do not necessarily think they should, but they may well do.
What, too, about the nationalist parties? The Scottish National party would probably not want its budget proposals debated ahead of the Scottish referendum, but perhaps we would like to have a close look at that and assess what would happen with Scotland. That is my first point—who is involved? It will be much more complex than suggested.
The second question is: how do we achieve this? Let us stay with the two main parties and the Liberal Democrats—I am sorry for not including the Liberals as one of the main parties. The reality is that only two parties are seeking exclusively to govern this country. The Liberal Democrats have said, quite fairly, that they will act in coalition with one or other of the main parties. That is a reasonable proposition, but their proposals are not “govern alone budget policies”; they are “modification of other parties’ policies in coalition”. Are we proposing that the OBR should reassess the costs of the policies in the Conservative and Labour manifestos as if they were in a coalition? It gets very complicated.
Finally, on a practical level, how on earth can the OBR be expected to do this? We know that manifestos come out incredibly close to the election, so there will be very little time for the OBR to carry this out. It would need to have advance sight of the manifestos, and possibly publish the figures at the time of their publication. If the parties involved then felt uncomfortable, they would simply say “Actually, that was a bit of work in progress, so please ignore it. We did not really mean to give away huge amounts of money to your pet charity.”
My point is that too many impracticalities need to be solved, and that they need to be solved at a much more leisurely rate. Let me return to my starting point. In 2010, when the Treasury Committee was considering setting up the OBR, it was perfectly happy to recommend this action. However, there was more or less a consensus in the House of Lords that it should absolutely not be taken, and Labour members of the Select Committee were very reluctant to put their name to our report.
The position is difficult. There is too much to be done. I am convinced that the time to do this properly is the beginning of the next Parliament, when we have plenty of time to think about it in a clear, measured and cool-headed way.
We have had what could best be described as a very interesting debate. Let me begin by picking up a point made by Mark Garnier, who said that the sums done by the Scottish National party and the Scottish Government did not add up. The Scottish Government’s child care proposals provide a good example of that. The Scottish Parliament Information Centre has studied the figures, and has demonstrated that the SNP’s sums do not add up and its policies do not make sense. However, that is not the subject of today’s debate.
I think that the debate has been useful, although, like others, I was a bit disappointed that the Chancellor had not seen fit to come to the House and defend the Government’s position. As for the Financial Secretary, I know from previous debates that she generally seeks to build consensus. Perhaps she was simply given a script and told to make the best of a bad job, but I was nevertheless surprised that she did not adopt her usual tone. It seemed to me that her heart was not in the argument that she was presenting, and that, given the opportunity and a slightly different setting, she might have adopted another approach.
We heard a number of thoughtful and considered contributions, not least from my hon. Friends the Members for Coventry North West (Mr Robinson), for Eltham (Clive Efford), for Edinburgh East (Sheila Gilmore), for Leeds East (Mr Mudie), for Oldham East and Saddleworth (Debbie Abrahams), and for Derby North (Chris Williamson). I have already mentioned the hon. Member for Wyre Forest. He too made a thoughtful speech, although I did not agree with everything that he said. We made one interesting discovery, namely that Jacob Rees-Mogg has not ruled out standing for the leadership of any political party. I look forward to observing his progress in the coming weeks and months.
My right hon. Friend Ed Balls explained our proposal very well, in his usual careful, considered and consensual style. I found it difficult to understand why Government Members took such exception to the way in which he set out what I thought was a very good case. The OBR already scrutinises the Government’s spending and tax policies and assesses whether they are reasonable, and we are merely asking for what is, essentially, a logical extension of that. We are suggesting that the OBR should perform the role that we propose not just for the current Government, but for prospective Governments.
As a number of my hon. Friends have pointed out, it would be sensible to require the OBR to audit only the manifestos of parties with 5% of the seats in the House. We need not involve it in every party manifesto. Ultimately, what the public want to know is that someone has looked at the sums of the parties that are likely to be in government to ensure that they add up.
Some Members on the Government Benches spoke as if the OBR would suddenly have to have a raft of civil servants and new people to do costings all over the place, every day of the week, for months and months. Let me again put on the record what my right hon. Friend the shadow Chancellor said in his letter in September to the head of the OBR:
“The reform I am proposing would mean the Opposition would submit costings for proposed manifesto commitments on spending and tax—obtained from, for example, the House of Commons Library, Parliamentary Questions or the Institute for Fiscal Studies”— it was interesting to note the number of times that Government Members referred to that; I hope that they will take account of the findings of that august body as the debate continues—
“and the OBR would ‘provide independent scrutiny and certification’ of those costings.”
Therefore, it is not the case, as seemed to be suggested, that the OBR is being expected to do all the costings. It is being expected to certify those.
The hon. Lady mentioned the Institute for Fiscal Studies. A look at its remit shows that this kind of work falls squarely under its banner. It also receives more than half its funding from the public purse, directly or indirectly. Does she not think that it could fulfil the role that the motion describes?
The IFS’s role is slightly different from the one that has been proposed. This is about scrutinising and certifying the policies and plans for government. One hon. Member mentioned the difference between costings and audit. We are saying that the costings should be looked at. That role is slightly different from the one that the IFS fulfils.
We are confident that our policies will stand up to that scrutiny. We are confident enough to say that we want the OBR to run the rule over all the spending commitments in our manifesto. As Members have rightly said, we recognise the need to restore trust in politics. The public want assurances that our policies add up. They want the OBR, having done the work, to be in a position to give them the quality assurance that they seek. We strongly believe that the other major parties should be prepared to do the same thing. That will enable the electorate to make an informed decision based on facts. That is important.
I am very short of time, unfortunately.
It is important to recognise that a number of people—Members have referred to this—have shown support in principle. The Government’s argument is twofold. First, they want to preserve the independence of the OBR. My hon. Friends have advanced a number of arguments as to why the Government seem to be the only people at this stage who are bringing party politics into the debate on the OBR. It is not Members on the Opposition Benches who are doing so. Secondly, it is important to recognise that the Government’s other objection is that there is insufficient time. However, we have the information and discussions have taken place with the head of the OBR. If we do not make a decision quickly and put measures in place, we will run out of time, but there is still a window of opportunity.
I hope that when he sums up the Minister will be able to answer some of the questions that the Financial Secretary to the Treasury was unable to answer earlier. What discussions have Ministers had with the OBR since the plans were first mooted? Our integrity, why we are making the proposal and what we have done about it has been questioned, but it is also the responsibility of Government to take these matters forward. I hope that the Minister will be able to give us information on that.
As far back as 2010, the Chancellor himself said that this was a
“legitimate matter for the House to debate and decide.”
It is unfortunate not only that in the intervening years he has not seen fit to address the issue, but that he has not seen fit to turn up today to give us any more information. That leaves us on this side of the House with no option but to draw the conclusion that the only reason why the Government do not adopt a consensual approach today and embrace the opportunity to take this proposal forward is that they have no wish to do this whatsoever, and I am sure the public watching will also draw that conclusion. The public will then also draw the inference that those of us on the Opposition
Benches draw: that the Government do not wish to have their policies put under the same scrutiny as we are prepared to have our policies put under.
We have had a lively debate this afternoon, with a number of contributions. Mr Robinson made a forthright speech. My hon. Friend Mr Streeter made an important point regarding concerns about subcontracting all matters to outside bodies. He also drew a comparison between the shadow Chancellor as a consensus-builder and King Herod as a babysitter. To be fair, my hon. Friend did say he thought he might have been a little unfair, although it was not entirely clear to whom.
Clive Efford reminded me to use the expression “long-term economic plan” in my speech, which I had not originally intended to do, but I am grateful for that reminder. My hon. Friend Jacob Rees-Mogg described this as a power grab by the shadow Chancellor, and he drew out what I think is an important point about the shadow Chancellor trying to instil some discipline into the Labour party. My hon. Friend also mulled over the prospect of the shadow Chancellor becoming leader of the Labour party. I think that is an unlikely career move—but the Labour party could certainly do worse.
Mr Mudie highlighted the fact that the OBR is an important institution. He objected to members of the Treasury Committee quoting Robert Chote, and then quoted Robert Chote. My hon. Friend Mike Thornton said there is a case for doing what is proposed but that we should wait until after the election, by contrast with Sheila Gilmore who said we should get on with it.
My hon. Friend Jesse Norman made a thoughtful speech, drawing on his knowledge and experience of the Treasury Committee, Edmund Burke and polling data, and argued that the reason for this motion is Labour’s lack of economic credibility. Debbie Abrahams made an impassioned speech, which I have to say I did not agree with—but it was impassioned.
My hon. Friend Mr Syms set out some of the practical difficulties of the proposal in the motion. Chris Williamson referred to hysterical outpourings. I think he used that phrase, and certainly the expression “hysterical outpourings” springs to mind when thinking of his speech. He spent four minutes accusing the Conservative party of all sorts of things, and then said the advantage of this policy is that it would end negative campaigning. We shall see.
In an excellent and short speech, my hon. Friend Damian Hinds raised concerns about politicisation of the OBR. My hon. Friend Mark Garnier also made an excellent speech setting out some practical questions.
I think it is worth just taking a few moments to remind the House of why the OBR was set up in the first place. The best evidence for this is the book published after the last election by the previous Chancellor of the Exchequer, Mr Darling, and in particular his chapter describing the events of the 2009 Budget, which was very clearly a negotiation on the position that the Treasury and the then Prime Minister took on economic growth. This was not about searching hard for the truth, therefore; it was a negotiation. That is worth bearing in mind when we hear about the shadow Chancellor being a builder of consensus and a zealot in the cause of independent oversight of fiscal forecasts, because what is also clear is that the shadow Chancellor was part of those negotiations.
“Sometimes there would be just two of us”,
meaning just him and the Prime Minister. He refers to the current shadow Chancellor being
“there on a few occasions”.
We have had a thoughtful debate, and arguments have been made on both sides about whether it is right that the OBR should be able to oversee Opposition party policies. However, there is a question about timing. The shadow Chancellor explained why the position of his party when the relevant legislation was taken through was to oppose that. He said earlier today that in the early days it was cautious about protecting impartiality; now, he appears to be incautious. There is an issue here, and Lord Eatwell made the point on
The next point to make is a practical one. The shadow Chancellor has long experience of involvement in policy matters and Budget matters. He will also have read the letter from Robert Chote of
“a time consuming and resource intensive exercise, both for the OBR and for the analysts in the responsible departments”— the likes of Her Majesty’s Revenue and Customs, and the Department for Work and Pensions. This is not a minor change. It is not about recruiting just a few more OBR staff; it is a fundamental change in the way the civil service operates with the Opposition.
The question we have to ask ourselves is why Labour is proposing this. As some Members made clear today, it is essentially about Labour’s lack of credibility on the economy. As Lord Prescott has said, Labour gets “smashed on the economy”. As the Leader of the Opposition’s former speech writer said, he fell out with the shadow Chancellor because
“Labour’s economic policy is nonsense.”
And as the shadow Chancellor’s old friend Charles Clarke has said:
“We rested a great deal on assuming…that plan A would not work, and that proved to be an unwise judgement.”
The head of the OBR also made it clear that there were risks involved, and that those advocating this step would find it would be better not to rush into it, but to do it after the next election, and that is the position we take. This issue should be looked at again after the next election.
The reality is that Labour does not have economic credibility. It borrowed too much in the good times when it was in office, and opposed our measures to reduce the deficit in recent years. Only a year ago, the shadow Chancellor said:
“The problem with austerity is that it chokes off jobs and growth”.—[Hansard, 17 May 2012; Vol. 545, c. 717.]
Well, we are getting new jobs and we are getting the growth. The truth is that Labour is making a long list of unfunded spending pledges. Today the shadow Chancellor said, “We have been exemplary”. I could give him a long list to show that they have not. I will give Labour one answer: if they want to restore fiscal credibility, their first step—change their shadow Chancellor.
Question accordingly agreed to.
Main Question, as amended, put and agreed to.
That this House recognises the important role of the Office for Budget Responsibility (OBR) in producing independent forecasts for the economy and the public finances, and the value this has had in restoring trust in official forecasts; notes that the OBR is a newly independent institution and judges that it would not be appropriate to involve it in party political matters at its first election; notes the comments made by the Chairman of the OBR, Robert Chote, in a letter dated