Office for Budget Responsibility (Manifesto Audits)

Jacob Rees-Mogg Excerpts

Wednesday 25th June 2014 Commons Chamber

[Ed Balls]

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.

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

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?

[Ed Balls]

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.

--- Later in debate ---

[Nicky Morgan]

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.

[Jacob Rees-Mogg]

Will my right hon. Friend give way?

[Nicky Morgan]

Yes, of course I will.

[Jacob Rees-Mogg]

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.

[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.

--- 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.

[Mr Newmark]

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.

[Jacob Rees-Mogg]

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.

[Ed Balls]

rose—

[Jacob Rees-Mogg]

How could I refuse?

[Ed Balls]

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?

--- Later in debate ---

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. The hon. Gentleman’s time is being used up. In fairness, interventions must be brief.

[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.