Office for Budget Responsibility (Manifesto Audits)

David Gauke Excerpts

Wednesday 25th June 2014 Commons Chamber

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

We have had a lively debate this afternoon, with a number of contributions. The hon. Member for Coventry North West (Mr Robinson) made a forthright speech. My hon. Friend the Member for South West Devon (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.

The hon. Member for Eltham (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 the Member for North East Somerset (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.

The hon. Member for Leeds East (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 the Member for Eastleigh (Mike Thornton) said there is a case for doing what is proposed but that we should wait until after the election, by contrast with the hon. Member for Edinburgh East (Sheila Gilmore) who said we should get on with it.

My hon. Friend the Member for Hereford and South Herefordshire (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. The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) made an impassioned speech, which I have to say I did not agree with—but it was impassioned.

My hon. Friend the Member for Poole (Mr Syms) set out some of the practical difficulties of the proposal in the motion. The hon. Member for Derby North (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 the Member for East Hampshire (Damian Hinds) raised concerns about politicisation of the OBR. My hon. Friend the Member for Wyre Forest (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, the right hon. Member for Edinburgh South West (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.

[Ed Balls]

Not true.

[Mr Gauke]

The shadow Chancellor says that is not true, but let me quote from page 226 of the previous Chancellor of the Exchequer’s book. He talked about discussions “rarely” reaching conclusions, and said:

“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”.

[Ed Balls]

I was the Education Secretary at the time. The accusation was that I was involved in a discussion of the growth figure. Can the Exchequer Secretary substantiate that?

[Mr Gauke]

I again refer to page 226. The right hon. Member for Edinburgh South West refers to the negotiations on the growth numbers. He says that the shadow Chancellor was “there”.

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 8 November 2010 about embroiling the OBR in “political controversy”.

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 15 January 2014 setting out the process. It involves a “preliminary ‘scorecard’ of measures”, and there is a detailed costing to note. It is an “iterative” process and during it, policies are refined and in some cases significantly amended. The important point is that this is

“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.”

[Ed Balls]

The head of the OBR told the Treasury Committee in March that if this was agreed in a cross-party way by early summer, by which he meant the end of June, we could proceed. If the head of the OBR is willing to proceed and there is agreement today, why will the Government not agree?

[Mr Gauke]

The head of the OBR also made it clear that there were risks involved, and that those advocating this step would find it 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”.—[Official Report, 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 put (Standing Order No. 31(2)), That the original words stand part of the Question.