David Gauke is Conservative MP for South West Hertfordshire and a member of the Treasury Select Committee.
So you think Gordon Brown is a bit sneaky?
For the past two weeks, the misleading way in which the Chancellor presented both his first and last Budget has been headline news. Clearly, a Brown Budget Statement is designed to obtain a cheer from gullible Labour backbenchers and not to provide a fair summary of the Budget measures. However, if you want to appreciate the full range of evasions and half-truths employed by the Chancellor, examine his evidence to the Treasury Select Committee.
After every Budget and Pre Budget Report, the Chancellor is cross-examined by the Committee. It should be an opportunity for those of us on the Committee to scrutinise the Chancellor’s policies in detail and, occasionally, it is. But, more often, it provides a lesson in how Gordon Brown avoids answering the question.
His last evidence session was on 29 March, 2007 and here are a few examples of how he does it.
(1) DISMISS EVERYONE ELSE'S OPINION
Unsurprisingly, Gordon Brown dismisses the opinions of his political opponents. However, respected academic institutions, such as the Institute of Fiscal Studies, fair little better.
For example, the IFS says that, in order to meet its child poverty target, the Government will need to spend an additional £4 billion a year on transfer payments. Not true, says Gordon, their assumptions about improved employment rates are wrong.
The tax changes in this year’s Budget will result in about 5.3 million households losing out, say the IFS. A Treasury official even confirmed that this was the case in evidence to the Treasury Select Committee. But Mr Brown refused to accept the figure – an improved take up of working tax credits will make all the difference, says the Chancellor.
Let us take the central electoral issue of public spending plans. At the last General Election, Gordon Brown claimed that the Conservative spending plans would result in a cut of £35 billion. This figure was reached by assuming that Labour’s public spending would remain constant as a proportion of GDP. In contrast, Conservative spending would have resulted in a fall in public spending as a proportion for GDP and the difference between the two, £35 billion in 2011-12 prices, constitutes a ‘cut’.
Now that the Government is scaling back its spending plans, the difficulty for Mr Brown is that, as the IFS has pointed out, by applying the same logic, the Chancellor has also just announced a £12 billion ‘cut’. When this was put to him, he dismissed the IFS analysis as ‘wrong’ and a ‘mistake’, although it is not clear why. Only Gordon understands these things.
By the way, the IFS stands by its assessments on all three issues.
(2) MAKE OPTIMISTIC ASSUMPTIONS
The Chancellor says he will meet his child poverty target because lone parent employment rates will rise. However, the IFS is already assuming a big increase in lone parent employment and, in any event, child poverty targets are not very sensitive to employment rates. Admitting that he has abandoned the child poverty target would not do his leadership prospects any good so he relies on an unrealistic assumption.
Mr Brown argued that higher take up for working tax credits will mean there will be fewer than 5.3 million households losing out from the Budget changes. However, little evidence was provided as to why take up will increase substantially and, as a Treasury official confirmed to the Committee, the budgetary assumption is that there will be no increase in take up of working tax credits over the next few years. Again, an unsupported assumption is used to spare Mr Brown’s blushes.
(3) JUMBLE UP THE NUMBERS
Is the tax burden rising or falling? It is a simple enough question and there is a simple enough table in the Treasury’s Red Book which shows that it is rising in the next few years. That, however, was not the answer we got from Mr Brown. Instead, he referred to another table which showed that the projections contained in the 2007 Budget for the tax burden are lower than the projections contained in the 2006 Budget – a different matter entirely.
Mr Brown claimed that the fall in the projected tax burden was as a consequence of the tax changes announced in his Budget and elsewhere. However, both the Budget changes and the other changes announced since the 2006 Budget (such as the doubling of Air Passenger Duty) have further increased the tax burden.
(4) TURN IT INTO AN ISSUE ABOUT THE CONSERVATIVES
This is an old favourite but used rather bizarrely in his evidence to us. In discussing the changes to income tax announced in the Budget (the doubling of the 10p rate and cutting 2p from the 22p rate), the Chancellor commented that he ‘noticed that when we had the Budget votes no party voted against it’. However, as was pointed out to him (and as he must have known), the changes to income tax take effect next year so there were no votes this year.
Still the Chancellor persisted in arguing that it had been supported in Parliament – ‘we had the vote on the measures in the House of Commons on Tuesday night and people did not vote against the measures’. Again he was corrected and told that the vote on the 20 pence rate of income tax was next year. He responded with the non sequitur ‘I am very interested to know that the Conservatives are going to vote against the 20p rate, that is very interesting’.
(5) KEEP THE OFFICIALS IN CHECK
Not only does the Chancellor avoid openness and transparency in his own evidence, but woe betides any official who gives informative answers to the Committee.
The day before Mr Brown gave evidence, senior Treasury officials appeared before the Committee. The Managing Director of Budget, Tax and Welfare, Mark Neale, was most helpful. He confirmed that 5.3 million households would lose out as a result of the Budget. He admitted that the budgeting assumption was that the take up of working tax credits would remain at current levels. And he also revealed that the additional sums announced in the Budget for the Financial Assistance Scheme, to compensate those who have lost their occupational pension schemes, constituted £1.9 billion at net present value, whereas the Chancellor had announced in his Budget a £6 billion figure (based on the sum of the nominal amounts).
Mr Neale was due to return the next day to give evidence alongside the Chancellor. Mysteriously, he was withdrawn at the last minute amidst rumours that Mr Brown was furious when he learnt of this evidence. It is hoped that Mr Neale has not been assigned to measuring tractor production in Siberia as a consequence.
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A year ago, I wrote that I thought it was in Gordon Brown’s best interests to call a snap election soon after becoming Prime Minister. He has had such a poor year since that this now looks highly unlikely. I fear that the country as a whole will have to suffer a few more years of Mr Brown’s evasions.
