Office for Budget Responsibility (Manifesto Audits)

Mark Garnier Excerpts

Wednesday 25th June 2014 Commons Chamber

[Ed Balls]

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.

[Mark Garnier (Wyre Forest) (Con)]

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 15 January this year saying:

“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?

[Ed Balls]

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 decide”—[Official Report, 12 October 2010; Vol. 516, c. 142.]

--- Later in debate ---

[Ed Balls]

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 every 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.

[Mark Garnier]

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?

[Ed Balls]

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.

--- Later in debate ---

[Nicky Morgan]

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.

[Mark Garnier]

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?

[Nicky Morgan]

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.

--- Later in debate ---

[Nicky Morgan]

Nothing in politics surprises me any more, so I am not surprised that the shadow Chancellor has done that. I am just surprised that he thinks that the House is going to buy it.

[Mark Garnier]

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 it 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—

[Madam Deputy Speaker]

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.

--- Later in debate ---

[Mark Garnier (Wyre Forest) (Con)]

It is a pleasure to follow my hon. Friend the Member for East Hampshire (Damian Hinds). It will be a surprise for the hon. Member for Derby North (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:

“Legislation should leave the OBR able to conduct work on fiscal policies of political parties along the lines proposed by Robert Chote in evidence on 16^th September”.

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, the Shadow Chancellor 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.