Office for Budget Responsibility (Manifesto Audits)

Andrew Love Excerpts

Wednesday 25th June 2014 Commons Chamber

[The Financial Secretary to the Treasury (Nicky Morgan)]

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 15 January 2014 to the House of Commons Treasury Committee that ‘to embark on this exercise in a rush, or with insufficient resources, could be very disruptive to the parties and very damaging to the OBR’; 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 the hon. Member for Bolton West (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.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

In an effort to keep the tone of consensus so admirably set by the shadow Chancellor, will the right hon. Lady accept that the amendment she is currently moving is selective in the quotes that it gives from the OBR, giving the strong impression that it is opposed to this, when clearly, it is in favour?

[Nicky Morgan]

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.

[Mr Love]

The reality is that the Government are trying to hide behind the OBR. The OBR is clearly in favour of the move, and although the Government are at liberty to say what they truly feel, let them be honest when we are trying to have a consensus in the debate.

[Nicky Morgan]

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. 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.

--- Later in debate ---

[Nicky Morgan]

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.

[Mr Love]

rose—

--- Later in debate ---

[Nicky Morgan]

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.

[Mr Love]

rose—

[Nicky Morgan]

I will give way briefly to the hon. Gentleman, but then I want to make some progress.

[Mr Love]

I thank the right hon. Lady. There is a transcript. After the production of the letter of 15 January, Robert Chote appeared before the Treasury Committee, where we interrogated him on all these issues. He confirmed that if all these issues could be resolved, he would be content to go ahead.

[Nicky Morgan]

I prefer to take notice of comments that are on the record, such as the following from Robert Chote. On 4 April 2014—[Interruption.] The shadow Chancellor should listen. This is what the head of the OBR said:

“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.”

--- Later in debate ---

[Nicky Morgan]

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.

[Mr Love]

Will the Minister give way?

[Nicky Morgan]

No.

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.

--- Later in debate ---

[Jacob Rees-Mogg (North East Somerset) (Con)]

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.

[Mr Love]

Does the hon. Gentleman accept that no one has the good order of the OBR—its credibility and independence—more at heart than the OBR itself, and it is in favour of this proposal? Will he therefore accept that it is Government opposition that is stopping it happening?

[Jacob Rees-Mogg]

That rather proves my point. Once again, we see the OBR immediately being drawn in to political controversy, and I want to free it from that.

--- Later in debate ---

[Jacob Rees-Mogg]

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 the right hon. Member for Morley and Outwood (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.

[Mr Love]

You never know.

[Jacob Rees-Mogg]

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.

--- Later in debate ---

[Mike Thornton]

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 the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) successfully persuaded the electorate of his prudence. Despite this latest attempt to do so, I feel that the right hon. Member for Morley and Outwood (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—

[Mr Love]

rose—

[Mike Thornton]

I was just coming to an end, but I will give way.

[Mr Love]

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?

[Mike Thornton]

That suggestion certainly has some merit. After the next election, when we have given—