In a move which is likely to cause hostility within the Treasury where it will be viewed as tantamount to an accusation that the books have been cooked, Gordon Brown would set up the audit as soon as he got into the Treasury.
In a speech today, the shadow Chancellor will set out the machinery for delivering the monetary policy, the low inflation, the investment and the sustained growth he wants to achieve in office.
He says that Labour "hates inflation", and wants sustained growth, but that requires a shake-up at the Treasury and the Bank of England to get rid of the instability generated by the "running dispute" of the so-called Ken and Eddie soap opera. The most immediate reform taken by Mr Brown would be the setting up of an independent check on the legacy that would be left by the Conservatives.
Labour leaders are acutely conscious of the hidden economic crisis inherited by Harold Wilson in 1964, after 13 years of Conservative rule, leading to a forced devaluation for which Labour took the full blame.
Labour is also aware that if it had won the last election, in 1992, it would have been excoriated by the Tories for the inevitability of sterling's fall from the European exchange rate mechanism, and the humiliation of the subsequent plunge in the value of the pound.
Labour is planning a full-scale budget before Parliament breaks for its summer recess in July, within 10 weeks of taking over from the Tories. But Mr Brown will say today: "We will ensure that the Government's fiscal projections are properly audited before the Budget."
It was not clear last night which independent group would carry out the audit, but one senior Labour source said Mr Brown would insist on "kosher, credible figures" - the hard truth, independently verified, on borrowing, debt and expenditure programmes.
Also, out will go the Treasury's present team of "wise people", who provide an independent assessment of government economic and monetary policy; a system condemned by Mr Brown as "haphazard".
Treasury advice would be broadened with a new Council of Economic Advisers, "reflecting a wider range of economic expertise". In an attempt to bolster the Bank's performance, Mr Brown would set up a Bank Monetary Policy Committee, chaired by the Governor, and including up to four outsiders brought in to enhance the Bank's reputation.
Mr Brown will say: "I have not hidden the fact that the parlous state in which the Government has left the public finances, with public borrowing at pounds 26bn this year ... will mean difficult choices on public spending." He will say that the personalisation of the differences between Kenneth Clarke, the Chancellor of the Exchequer, and Eddie George, Governor of the Bank of England, risked undermining the credibility of interest rate and inflation policy.
"This risk has become a reality now that the argument between the Governor and the Chancellor is conducted through speeches and interviews on both sides."
In an attempt to show that he means business, Mr Brown will say: "Inflation undermines business success. It creates instability. It harms investment and the damage it does, as the experience of the late Eighties shows, takes years to undo. There is an additional reason why Labour hates inflation. The people who suffer most are those on fixed and low incomes, especially the elderly, the people who are least able to defend themselves."Reuse content