By Tash Shifrin
28 January 2010
A group of former Whitehall mandarins has called for increased parliamentary scrutiny of the Budget and government fiscal policy, as political tension over the state of the public finances increased this week.
Prime Minister Gordon Brown and Conservative leader David Cameron traded blows over the government’s deficit as new gross domestic product figures released on January 26 showed the UK escaping recession by the slimmest of margins – with a 0.1% growth in the fourth quarter of 2009.
Brown reiterated that a plan to reduce the public borrowing – which now stands at £119.9bn for the financial year to December – could not be introduced immediately because it would put the recovery at risk.
Next month, crucial figures showing tax receipts for January will be published. They will have a significant impact on the Treasury’s coffers as they include Income Tax self-assessment returns for 2008/09 and a large tranche of Corporation Tax.
Reforms outlined in the Good government report, published by the former senior civil servants on January 27, included the introduction of a genuine ‘Green Budget’ allowing MPs to debate planned Budget measures and draft clauses on new taxes ‘at least as early as the present Pre-Budget Report’.
The Better Government Initiative group, which includes former Cabinet secretary Lord Butler and Sir John Chilcot, also called for the National Audit Office to commission reports for Parliament on the fiscal forecasts and Budget proposals.
The report criticised ‘sofa’ government, heavily influenced by special advisers, which meant ‘the track record on economic management, public expenditure planning and control, and financial regulation... has increasingly come to be questioned’.
Former Treasury head of public expenditure Sir Nicholas Monck, a co-author of the report, told Public Finance: ‘The whole timetable of information and advice and debates and votes needs reviewing.’
The proposed reforms would be a significant change from the current ‘rather hopeless process’, in which MPs were not well equipped to challenge the government, he said. ‘The business of whether we are going to hell in a handcart on fiscal policy is important.’
Gemma Tetlow, senior research economist at the Institute for Fiscal Studies, said: ‘We’ve always been in favour of greater transparency in fiscal forecasting.’ She said that although the initial suggestion was that the PBR would act as a Green Budget, it had essentially become ‘a second Budget’.
