Office for Budget Responsibility (Manifesto Audits)

Debate between John Glen and Robert Syms

Wednesday 25th June 2014 Commons Chamber

[Mr Robert Syms (Poole) (Con)]

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 the Member for Richmond (Yorks) (Mr Hague) were for the country? Simply on the basis of the 2001 election, no. Would there have been a lot of benefit in looking at the plans of my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) or of Michael Howard? The only time when there might have been some benefit would have been before 2010, when it looked like there would be a change of Government.

[John Glen]

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.

[Mr Syms]

Yes, and lots of assumptions would still have to be made. Clearly, my hon. Friend the Member for Chichester (Mr Tyrie), the Chair of the Treasury Committee, made some very good points about ground rules that ought to be discussed in peacetime. 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.