POLITICS

Treasury Costing Labour's Spending Plans 'Doesn't Make Sense', Ex-Official Warns

05/01/2015 14:26 GMT | Updated 05/01/2015 14:59 GMT

George Osborne's aides should not be responsible for helping estimate how much Labour's spending plans would cost the public purse, a former top Treasury official has said.

Speaking to the Huffington Post UK, Owen Barder, who was private secretary to Tory chancellors Ken Clarke and Norman Lamont, and later oversaw the costing of opposition spending plans, said: ”It doesn't make any sense for costings to be done under assumptions drawn up not by the party whose policies are being costed but by their opponents.

"If you're in government and you're costing opposition policies, you have an incentive to make them sound as expensive as you can so you can choose your assumptions with that in mind."

This comes as the chancellor used analysis by Treasury officials, using assumptions from his special advisers, to accuse Labour of planning to spend £13.5 billion more in extra debt interest payments if it wins this year's election.

Labour's shadow chancellor Ed Balls has disputed this analysis, warning that Treasury officials were being put in an "impossible position" because Tory advisers were "consistently" providing them with false assumptions about the other parties' plans.

Barder, who later served as an economics adviser to Tony Blair, said estimates should be made by an outside body like the Office for Budget Responsibility, the watchdog set up to provide "independent" analysis of government spending plans.

"Costing opposition policies a fairly laborious process," he said. "When I was doing it, the Treasury was careful not to be drawn into the political part of identifying the opposition policies to be costed and careful to insist on being given the assumptions against which they were going to costed so they weren't drawn into the political fray.

Barder, who now works as a senior fellow at the Centre for Global Development, went on: "It's a rather laborious process that doesn't feel, as it's currently conceived, as if it's aimed at providing impartial information for voters to make a choice, it feels like it's providing information for political opponents to score points off each other."

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"Democracy isn't terribly expensive. we're much more likely to break the public purse by not having very good estimates of policy choices than we are by giving a few extra quid to the OBR to do the costings. Having properly done costings seems to be money well spent."

The idea of enlisting the OBR to audit the main party's spending plans has gained increasing momentum, with Treasury select committee chair Andrew Tyrie describing himself as "keen" about it.

Tyrie, Tory MP for Chichester, said: “It would significantly enhance the quality of public debate and encourage greater fiscal discipline."

Robert Chote, head of the public spending watchdog, said in March that costing the main parties' spending plans would be "difficult but no means impossible".

Speaking last March, he told MPs that an agreed framework and details would need to be thrashed out between the parties, adding: "The ability to do that is not entirely in our own hands."

"At the end of the day, if Parliament wants us to try this, we will do it to the best of our ability, given the resources and the time we have available to us to attempt it."

Speaking in a press conference on Monday, Osborne told reporters that the proposal could be considered after the next election.

Labour has repeatedly called for the OBR to audit the main parties' spending plans, with Ed Balls writing a letter to the Treasury's top civil servant Sir Nicholas Macpherson to press his case.

Balls wrote: "Unfortunately, the current process set out in the Ministerial Code, where officials carry out costings based on assumptions provided by special advisers, is now putting HM Treasury officials in an impossible position owing to Conservative advisers consistently providing blatantly false and politically motivated assumptions. Just this weekend, they have used figures based on false assumptions about Labour's fiscal plans.

"The current process also fails to specify the scale of unfunded commitments made by the Conservatives and Liberal Democrats."

However, other ex-Treasury civil servants were less sympathetic to Balls' concerns. James Dowling, a former official who now works at FleishmanHillard, told HuffPostUK that it was "an entirely confected political discussion".

He went on: "Ministers of successive administrations have used the civil service to cost policies – whether from the opposition or elsewhere. Political scrutiny of this practice inevitably increases as the election draws near, and there are clear rules in place to stop the civil service being used as an extension of the research arms of any political party.

"The recent activity, however, looks very much like what’s gone on before – arrangements with which Labour was obviously perfectly happy when they were in Government. To this end, it’s a bit rich of Labour to protest when the boot is on the other foot."

The Treasury has previously dismissed concerns that its officials were helping as a "coalition propaganda machine".

A spokeswoman said: "Successive government administrations have accepted that since government departments provide factual answers to MPs and peers about the costs of identifiable changes in activities or benefits, there is no objection to officials providing Ministers with similarly factual information about clearly identified opposition policies."