Jeremy Hunt is the Shadow Chancellor, and the MP for Godalming and Ash
Something very serious happened in the House of Commons on Monday. Labour, in their haste to try to pretend that they were unaware of the state of the nation’s finances, made a big mistake. A mistake that exposes a cynical attempt to hoodwink the public about the state of the economy.
Of course, everyone understands the politics of what Labour are trying to do. They knew they would not want to do welfare reform, ask the unions for productivity improvements in return for above-inflation pay rises, or reduce the asylum bill with the Rwanda policy. But they didn’t want to be honest about the tax rises that entailed, instead telling us over 50 times that there was no need to raise taxes.
They also had full knowledge of the nation’s financial situation. Rachel Reeves herself said that “you don’t need to win an election to find out the state of public finances”, as “we’ve got the OBR now”. In reality, the public finances, whilst facing pressure post-Covid and Ukraine, are resilient and we have left an inheritance that bears absolutely no resemblance to what we received from the Labour government in 2010.
The deficit today is 4.4 per cent compared to 10.3 per cent in 2010. Other indicators are even more positive: inflation is 2 per cent compared to 3.4 per cent then; unemployment is 4.4 per cent compared to 8 per cent then; growth was forecast then to be among the slowest in the G7, compared with the fastest today.
Instead of taking the tough decisions and taking responsibility for those decisions, Labour are trying to lay the ground for tax rises they have known about all along with a cock and bull story about a black hole.
What is even more concerning about Labour’s claims is that they stand in direct contradiction to the documents and legislation signed off by senior civil servants and published just last week by the government.
On the 17th of July, the new Labour government published the Main Estimates for 2024/25. These present the Government’s spending plans for that year and, in the established process, are put before the House of Commons to gain parliamentary consent before spending public money.
All Government departments produce Estimates and each one is signed off by the relevant Departmental Accounting Officer. After Estimates have been completed and published, the Government puts a Bill before Parliament to obtain parliamentary approval. This was done last week and the Bill was laid in the name of the Chancellor and Treasury Ministers.
These Estimates and the Bill simply set out the spending plans as outlined by the previous Conservative government. No changes were made and there was no mention of a supposed multi-billion pound black hole whatsoever.
The numbers contained within Estimates had all been signed off by Permanent Secretaries across Whitehall, including the Permanent Secretary in the Treasury. The Estimates guidance manual, which provides advice for Accounting Officers on how to put together accurate Estimates is clear that “Departments are responsible for…ensuring that Estimates are consistent with their best forecast of requirements”.
Yet despite the work being signed off by Senior Civil Servants and then legislation put to the House of Commons, the Chancellor is now saying that these forecasts of requirements are wrong and therefore Senior Civil Servants were wrong. She went further. She called the spending plans “unforgivable”.
Either the spending plans in Estimates signed off by senior civil servants and presented to Parliament are incorrect, or the document the Chancellor produced this week is incorrect. So Ihave written to the Cabinet Secretary to try to get to the bottom of this discrepancy as the conflict between the Estimates signed off by Senior Civil Servants and the claims made by the Chancellor risk bringing the civil service into disrepute.
We cannot have a situation in which conflicting information on the public finances is put before Parliament, with no relevant explanation for why it has happened and no formal correction of the record. We will keep pushing for Ministers to clarify this situation.
The statement by the Chancellor on Monday was an exercise designed to cover up the great tax betrayal coming in the Autumn Budget. This week they revealed how they are planning to get away with it. We will not let them.
Jeremy Hunt is the Shadow Chancellor, and the MP for Godalming and Ash
Something very serious happened in the House of Commons on Monday. Labour, in their haste to try to pretend that they were unaware of the state of the nation’s finances, made a big mistake. A mistake that exposes a cynical attempt to hoodwink the public about the state of the economy.
Of course, everyone understands the politics of what Labour are trying to do. They knew they would not want to do welfare reform, ask the unions for productivity improvements in return for above-inflation pay rises, or reduce the asylum bill with the Rwanda policy. But they didn’t want to be honest about the tax rises that entailed, instead telling us over 50 times that there was no need to raise taxes.
They also had full knowledge of the nation’s financial situation. Rachel Reeves herself said that “you don’t need to win an election to find out the state of public finances”, as “we’ve got the OBR now”. In reality, the public finances, whilst facing pressure post-Covid and Ukraine, are resilient and we have left an inheritance that bears absolutely no resemblance to what we received from the Labour government in 2010.
The deficit today is 4.4 per cent compared to 10.3 per cent in 2010. Other indicators are even more positive: inflation is 2 per cent compared to 3.4 per cent then; unemployment is 4.4 per cent compared to 8 per cent then; growth was forecast then to be among the slowest in the G7, compared with the fastest today.
Instead of taking the tough decisions and taking responsibility for those decisions, Labour are trying to lay the ground for tax rises they have known about all along with a cock and bull story about a black hole.
What is even more concerning about Labour’s claims is that they stand in direct contradiction to the documents and legislation signed off by senior civil servants and published just last week by the government.
On the 17th of July, the new Labour government published the Main Estimates for 2024/25. These present the Government’s spending plans for that year and, in the established process, are put before the House of Commons to gain parliamentary consent before spending public money.
All Government departments produce Estimates and each one is signed off by the relevant Departmental Accounting Officer. After Estimates have been completed and published, the Government puts a Bill before Parliament to obtain parliamentary approval. This was done last week and the Bill was laid in the name of the Chancellor and Treasury Ministers.
These Estimates and the Bill simply set out the spending plans as outlined by the previous Conservative government. No changes were made and there was no mention of a supposed multi-billion pound black hole whatsoever.
The numbers contained within Estimates had all been signed off by Permanent Secretaries across Whitehall, including the Permanent Secretary in the Treasury. The Estimates guidance manual, which provides advice for Accounting Officers on how to put together accurate Estimates is clear that “Departments are responsible for…ensuring that Estimates are consistent with their best forecast of requirements”.
Yet despite the work being signed off by Senior Civil Servants and then legislation put to the House of Commons, the Chancellor is now saying that these forecasts of requirements are wrong and therefore Senior Civil Servants were wrong. She went further. She called the spending plans “unforgivable”.
Either the spending plans in Estimates signed off by senior civil servants and presented to Parliament are incorrect, or the document the Chancellor produced this week is incorrect. So Ihave written to the Cabinet Secretary to try to get to the bottom of this discrepancy as the conflict between the Estimates signed off by Senior Civil Servants and the claims made by the Chancellor risk bringing the civil service into disrepute.
We cannot have a situation in which conflicting information on the public finances is put before Parliament, with no relevant explanation for why it has happened and no formal correction of the record. We will keep pushing for Ministers to clarify this situation.
The statement by the Chancellor on Monday was an exercise designed to cover up the great tax betrayal coming in the Autumn Budget. This week they revealed how they are planning to get away with it. We will not let them.