Governments come and go. But the political gameplaying never stops. So this week we had the new chancellor and chief secretary to the Treasury tut-tutting and sucking their teeth, like a pair of plumbers called out to fix the boiler.
According to George Osborne and David Laws, the last lot left behind a shocking mess.Fiscal forecasts had been fixed by Treasury number-crunchers at the bidding of ministers. ‘Crazy’, scorched-earth spending decisions were made against the advice of senior officials.
That joker, Liam Byrne, even left his successor a ‘funny’ note saying there was no more money. Clearly, this lot didn’t have a Corgi certificate between them.
Some of this knockabout stuff should concern us, but not much.
Macroeconomic forecasting under Labour was nothing like as bad as implied.
And who could have guessed at the scale of financial collapse that threw out Treasury figures after 2008?
Nor were ministerial ‘letters of direction’ on spending necessarily a bad thing, particularly where there was a wider public interest at stake.
But the Con-Lib coalition is clearly determined to draw a line under the botched job it says the last incumbents made of running the economy.
That’s why Laws has ordered a review of all Whitehall spending decisions since January. And Osborne has outsourced fiscal forecasting to a new quango, the Office for Budget Responsibility.
Chaired by former chief economic adviser to the Treasury, Sir Alan Budd, the OBR will produce revised forecasts ahead of the June 22 emergency Budget and beyond. The point, says the chancellor, is to put any temptation to ‘fiddle the forecasts’ out of temptation’s way.
All of which is laudable, but as Colin Talbot points out (see page 6), there are some potential snags.
The suggestion that the UK’s public finances are not properly audited is likely to spook the already rattled markets. And the chances of coming up with alternative, politically independent, projections in a matter of weeks is pushing it to say the least.
But this is a government in a hurry. With £6bn worth of extra efficiency savings about to be announced, and a likely VAT rise and 25% departmental budget cuts down the line, the public needs to be convinced of the truly parlous state of the finances.
Ministers are going about it in the time-honoured way – by blaming the last lot of cowboys for fouling things up. What was that about the New Politics?
Judy Hirst, deputy editor of Public Finance
