Plans for OBR to audit opposition party manifestos in jeopardy

George Osborne has cooled on the idea of allowing the OBR to cost the tax and spending policies of all parties (Getty Images)

Time is fast running out for the Office for Budget Responsibility to audit the manifestos of the opposition parties at next year’s general election, the head of the watchdog warns today.

Labour has been pushing for the OBR to be given the power to scrutinise its spending proposals in advance of the 2015 poll. But this would require a change in the law and the Conservative leadership is resisting the idea.

In an interview with The Independent, the OBR's chairman Robert Chote says that if the two main parties were to agree to alter the law before this summer it could still happen but that he now does not expect a deal to be done in time.

“My current expectation is that window [of opportunity] is likely to shut before there is agreement simply on the basis of where the parties are at the moment” he said.

Mr Chote said that if no agreement in principle between the parties is reached within the next three months it will be “too late” and that he will not support moves to give his body this responsibility after that date.

In October 2010 George Osborne told that Treasury Select Committee he would hold discussions with Opposition party leaders over allowing the OBR to cost the tax and spending policies of all parties. But Mr Chote said that the Chancellor has since cooled on the idea.

“The Chancellor perfectly reasonably has said he doesn’t think this is the right time to do this” he said. “The reasons he has cited are it’s the first general election we’ve existed [and] you don’t want to throw the OBR as a relatively young body into a politically contested territory now.”

Mr Chote said that in order to perform the pre-election auditing job properly the OBR would need more resources and considerable time to hire more qualified staff. He also said that deciding on the “rules of the game” would be a lengthy process.

One problem he singled out was the question of how much access opposition parties would have to civil servants in drawing up their plans. “What sort of work can civil servants do with opposition parties that the government of the day doesn’t have access to? I’m sure it’s not an insuperable thing – but it’s something that does have broader implications than just for us,” he said.

The Conservatives have been moving in the opposite direction on this issue. Last month David Cameron wrote to the Labour leader Ed Miliband to say that he plans to reduce the window of pre-election contact between the opposition and the civil service to six months. Traditionally Opposition parties are permitted up to 16 months of contact with Whitehall in order to facilitate a smooth potential handover of power.

Andrew Tyrie, the chair of the Treasury Select Committee, supports the idea of the OBR auditing parties’ spending plans. Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury has said it is proposal that is “well worth considering”. But when the shadow Chancellor Ed Balls announced at Labour’s party conference last October that he wanted the OBR to audit his party’s spending plans the Conservative Treasury minister Sajid Javid dismissed it as a “stunt”.

The OBR’s executive board also announced yesterday that it has commissioned an external review of its performance over the past four years. This will be headed by Kevin Page, a former head of the Canadian fiscal watchdog. Mr Page will conduct his review over the summer and report in September. He will look at the OBR’s forecasting performance as well as its role in guarding the integrity of the public finances.