A better way of doing politics

What fun to be a new Government. In you bound, full of non-partisan cheer and an unshakeable conviction that you can make the world a better place.

As did the Coalition. Within ten days of taking power, George Osborne had delivered a landmark speech – “not about party interests [but] about the national interest” – in which he announced the creation of a new, independent Office for Budget Responsibility. Such stood to deliver many benefits:

  • It would “[w]ith help from a secretariat of civil servants…  be in charge of making independent forecasts for the economy and the public finances.”
  • It would “remove the temptation to fiddle the figures by giving up control over the economic and fiscal forecast”
  • We would become “one of the few advanced economies with an independent fiscal agency that produces official fiscal and economic forecasts.”

And there would be “nowhere to hide the debts, no way to fiddle the figures, and no way of avoiding the difficult choices.”

A marvellous thing.

In opposition, Labour came to wonder whether the OBR might be a route to counteract public scepticism that it could be trusted with the economy. If the political parties were to submit their manifestos to the OBR to be costed, the public might take a less jaundiced view of deliverability. As Robert Chote, Chairman of the OBR, wrote to Andrew Tyrie, Chairman of the Treasury Select Committee:

I believe that independent scrutiny of pre-election policy proposals could contribute to better policy making [and] to a more informed policy debate.

That letter (which is well worth reading) goes on to set out a number of (achievable) pre-conditions to that objective being achieved.

Labour eventually procured a debate on the issue. The motion was:

That this House believes the role of the Office for Budget Responsibility should be enhanced to allow it to independently audit the spending and tax commitments in the general election manifestos of the main political parties, and calls for legislative proposals to enable this to be brought forward at the earliest opportunity.

And it was defeated.

The Conservatives’ position – not unsupported by Robert Chote’s letter – was that any change in the OBR’s remit was temporally too proximate to the general election to be implemented.  As the then Financial Secretary to the Treasury, Nicky Morgan (who opened the debate for the Coalition) (Column 392) put it:

we are not suggesting that the issues that the shadow Chancellor’s proposals present are insurmountable, but we do believe very firmly that the independence and operation of the OBR is critical. We need to make sure that independence and impartiality is preserved, and as such, Parliament would need time to scrutinise the proposals properly and the OBR still needs time to establish itself fully as an independent fiscal watchdog before being drawn into the political heart of a general election.

So not now, but next time.

Nevertheless, we had the cautious beginnings of a political consensus. And by goodness, the electorate needs it. When the FT, not often Pravda for this sort of agitprop, writes

The deficit policies of both main parties blur into one. Forgetfulness or deceit, it does not matter. When the new government opens the books after the election and the truth comes out, voters will think their new rulers are a bunch of liars who were willing to say anything to get elected. They would be right,

then the hour is surely nigh.

If we are to do more than talk about addressing public cynicism about politics, if politicians are to be incentivised to be straight with the electorate, if we are to fight back against the destructive tribalism that passes for public engagement with Government finances, then it is with measures like this that we must start. Technocratic, apolitical but incredibly important.

I shall be inviting the Liberal Democrat incumbent, Simon Hughes, and the Labour challenger, Neil Coyle, in my constituency, Bermondsey and Old Southwark, to indicate their support for these measures. I hope you might ask the same of your candidates.

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11 thoughts on “A better way of doing politics

  1. Others have had similar thoughts so it’s good to see this call for action amongst MPs. Indeed, why not ask for this to be part of the party manifesto in the next election – what would be the reason for any opposition? Is tax really too taxing for such new thinking?
    A year ago Judith Freedman (Professor of Tax Law, Oxford University) reviewed the role of bodies such as the OTS, PAC, and the GAAR Advisory Panel. She concluded “Is there a need for a dedicated and expert tax institution to scrutinise and act as the bridge between HMRC and Parliament? Are there models we can look to elsewhere for this? Or should we formulate our own unique scrutiny institution to sit side by side with a new Office of Tax Policy?” (http://www.sbs.ox.ac.uk/sites/default/files/Business_Taxation/Docs/Publications/Policy_Papers/creating-new-UK-institutions-for-tax-governance_0.pdf)
    The House of Lords Economic Sub-Affairs committee recommended “Parliament should have greater oversight over HMRC. We recommend that Parliament should establish a joint committee made up of MPs and Peers along the lines of the Intelligence and Security Committee. HMRC should be required to give members of this new committee private access to the details of individual settlements with multinationals so as to provide effective parliamentary oversight of HMRC while maintaining taxpayer confidentiality. The new committee could be advised by the National Audit Office which would need to recruit more tax experts for this role.”
    And ARC proposed in July to a Parliamentary event
    “To improve scrutiny Parliament would have access to a greater level of professional tax advice than currently. This could be done by making additional staff available to Parliamentary Committees such as the Treasury Select, Public Accounts, and Lords Economics Affairs. An alternative would be to create a new body with a role akin to that of the Office of Budget Responsibility (OBR). Such a body could be staffed by secondees from HMRC. Similar arrangements are already in place for staffing the Office of Tax Simplification (OTS) and the Adjudicators Office. Other alternatives could be to have staff drawn from academia or professional firms. However it is done the aim would be to increase the capacity and support available to politicians to scrutinise the impact of tax proposals. Questioning would be better informed and directed at clear weaknesses or risks in legislation or taxpayer behaviour. We would also envisage that when considering parliamentary scrutiny there would be an opportunity for Civil Society to join in the debate and ensure its views are heard.”
    http://blogs.mazars.com/letstalktax/files/2014/07/Tax-Transparency-The-Tax-Landscape-discussion-paper.pdf

  2. Yep – definitely advantages to bluer sky thinking too. There’s a lot to be done. This suggestion – apparently Labour policy and teetering on the brink of Tory policy – sees tax as part of a bigger issue around electoral transparency. One small push, and we’re there.

  3. Frankly, anything that increases the accountability of our politicians is worth looking at. Indeed, pre-election promises are a prime example of an area where independent verification is needed. These promises are made with the explicit purpose of enticing people to vote for a particular party. At the moment, they are too easy to make (almost glibly) and no one really holds the party to account on those promises. Yes, one could switch allegiance at the next election as a way of registering dissatisfaction at the broken promises but 5 years is a long time to wait for that opportunity!

    I realise, of course, that this proposal would only result in the OBR reporting on the costing of political promises. It would still be open to the politicians to break their promises but it would be a good place to start.

  4. Thanks David. I entirely agree.

  5. Although I agree with the proposal as a practical solution for improving political debate, there are a few aspects of the current political landscape which make me wonder whether this would help address, or indeed be relevant to, the public’s cynicism towards politicians.

    The question occurs to me, in light of the discussions on the TV debates, who should be considered main parties and whose economic musings should be given an “audit”.

    I have no idea the amount of effort needed to perform these manifesto services and whether it would be prohibitive to provide significant services to more than a few parties. I think it is fairly obvious to point out that it will not reduce cynicism over the “Westminster consensus” if the OBR’s approval is restricted to the “main” parties.

    I see that this question, and the attached issues of scope, are asked in Robert Chote’s letter to Andrew Tyrie. So I shall save my breath reiterating such points, except to say that in the context of reducing cynicism, the inclusion of as many parties as possible within this scheme seems desirable.

  6. Thanks for posing the question. I agree that the OBR should have a formal responsibility for costing the main political parties’ manifesto commitments. The three main reasons for valuing the OBR adopting this formal role are:

    1) It would provide an even stronger basis for ‘Access Talks’ with civil servants in the run up to elections. The civil service need to be ready for changes in Government – and be prepared to work with new teams. New Governments often express frustration with the pace of change and support from within departments. Having worked on policies with civil servants through the OBR in advance could help bridge these difficulties.
    2) It would assist Oppositions in focusing on entering Government. Having additional formal, public and accessible scrutiny of policies would help any major political party. By way of example, the Lib Dems excused their broken pledge on university tuition fees by claiming they didn’t expect to be in Government and didn’t ever intend to implement the policy. The OBR costing the idea may have prevented the Lib Dems posing it and ending up with their severely damaged reputation as a result. Arguably the Lib Dems could have delivered their pledge if they had prioritised it sufficiently in their negotiating team. But focusing on having fully costed proposals and priorities benefits any party entering Government.
    3) Oppositions have insufficient resources. Whilst governing parties have the benefit of state funded machinery to deliver policies and messaging, Opposition parties are frequently strapped for cash. We compare badly globally for the policy/analysis resources we provide those we select to represent us. Providing a small resource through OBR analysis of policies could benefit Opposition parties – and Government overall longer-term as a result.

    Thanks again for the question. I hope to see the OBR role extended under a Labour Government from May.

  7. This is a simple transparency and engagement idea that should be pressed for in manifestos this time around. Of course the work involved makes implementation less simple, so I share the concerns of Ben. However, perhaps a pragmatic approach would be the requirement being there for those who field candidates in all constituencies, including those who field candidates in their constituent parts of the UK e.g. Plaid, SNP, DUP etc

  8. Thanks for comment. Chote addresses the implementation issues in his letter which is worth a read.

  9. Have now read. You did say to do that in your post! Chote questions the level of detail required to be given to enable costings to be reviewed. I’m guessing that in itself will limit those parties who could be involved. Does this create another barrier to entry to the political scene? Only serious players on a certain scale and level of resource (both financial and human) will have any hope of accessing the potential benefit of an OBR stamp of approval.

    Of course, the Independent candidate campaigning on a vision, shining a light on injustice and speaking to general themes would have no need of such review!

  10. Such a candidate, Richard Lupson Darnell, would not.

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