Last week, the new Prime Minister Sir Keir Starmer and the Leader of the Opposition Rishi Sunak (it still feels strange to write that) met face-to-face for the first time since the general election. In that meeting in Parliament last Tuesday, both leaders gave their first official addresses to the Commons in their new roles. Sunak graciously congratulated his opposite number on his election victory, somehow managing to hold back the tears as he did so. His speech was in remarkable contrast, however, to the scrappy election campaign that had taken place over the previous six weeks.
One of the earliest tells that the 2024 election trail was going to be unedifying came when Sunak and Starmer met in the televised head-to-head debate of June 4th. Amongst other barbs, Sunak claimed there that Labour would level a £2000 tax rise on every household in the country. The then-Prime Minister said that this figure was compiled by “independent Treasury officials”, and had been calculated based on the policy proposals put forward by the Labour Party. Though Starmer eventually refuted that claim, it didn’t stop the next day’s newspapers being dominated by the figure — presumably exactly as Sunak had intended.
After a few days — by which time the Conservatives had already flooded social media with posts hammering home the message that Labour would raise taxes by £2000 per household — the Treasury’s Permanent Secretary wrote a letter to the Shadow Chief Secretary to the Treasury. In the missive, James Bowler wrote that the figure presented by Sunak “include[d] costs beyond those provided by the civil service and published online by HM Treasury”. Bowler added that “any costings derived from other sources or produced by other organisations should not be presented as having been produced by the civil service”. The subtext was clear — these were sexed up figures, and they had not been independently arrived at or verified by officials. Moreover, presenting them as official opposition costings arrived at by civil servants revealed an intention to mislead. The claim became this election campaign’s equivalent of the infamous £350m sum emblazoned across Boris’ Big Red Bus — a specious statistic thrown out by the Vote Leave bloc designed to catch eyes and generate outrage. Like that £350m figure, Sunak’s £2000 claim was soon criticised by fact-checkers and think tanks alike, and even the Spectator magazine.
Sunak’s claim made headlines in this year’s election, but opposition costings are not new, and this is not the first time they have proven controversial. In this blog, we will look briefly at the history of the opposition costings process, the flawed basis on which they are carried out, and what a future government could do about the process to ensure it helps to provide information to the electorate, rather than muddy the waters, as the process did this year.
A history of opposition costings and how they work
Opposition policy costings are estimates produced by civil servants at the request of government ministers. They tend to consider the financial implications of certain opposition policies.
The process has been occurring for many decades now, since at least the postwar period. To be clear, governments of both colours have utilised the process for political point-scoring, including when, in 2005, New Labour levelled claims at the Conservatives that they were planning covert public service cuts, based on published Tory plans.
The opposition costings process was initially established in the interests of fairness. It was reasoned that since the government of the day was regularly expected to provide factual answers about the costs of identifiable changes in policy, so too opposition party policies should be subject to the same scrutiny. The principle makes sense, but in reality the system is flawed. As costings are often based on assumptions made by ministers (or more likely, special advisers), it means that data can be cherrypicked to support political arguments, as was the case with the £2000 tax claim by Sunak this year.
A similar instance occurred back in 2015 when David Cameron’s government claimed that Labour would need to raise taxes to accommodate their projected spending plans. This was based on a headline figure of £21bn of public spending that the Tories had calculated via Treasury opposition costings, but based on their own set of assumptions. That £21bn headline figure was soon fact-checked and found to be significantly exaggerated. For one, the figure was totted up incorporating out-of-date policy announcements by Labour, and inflated costs considerably by suggesting that Labour would introduce new policies earlier than they had said they would. Embarrassingly for the Conservatives, the independent Institute for Fiscal Studies said at the time that in fact Labour had the ‘most cautious’ fiscal approach of the three main parties in the run-up to the 2015 election, undermining the Conservatives’ complaints of Labour profligacy.
Alongside confusing the electorate, these costings also put civil servants in an awkward position. Obviously prejudiced requests can put civil servants in the compromising position of having to consider refusing to follow ministers’ instructions. Doing so goes against the fundamental duty of being a civil servant in the UK — to serve, with neutrality, the government of the day. On the other hand, going along with the process, when officials know that their calculations will be used selectively, also opens up the civil service to accusations of partisanship by the opposition, especially when those opposition parties do not have access to officials’ time to cost policies.
Future reform
The new Labour government has not yet said if it plans to reform the opposition costings process. It will be telling if they do decide to in the future given the negative publicity they were exposed to during this election campaign. As is often the case in politics, though, it may well be that they see the benefit of the process when they are in power. Should they look to reform the process in the future, however, other countries may offer reasonable alternative models.
In the Netherlands, the Central Planning Bureau exists to offer all political parties the opportunity to independently cost their policies. The Bureau is financed by the Ministry of Economic Affairs and Climate Policy, a government department, but it operates independently from it. As the costings of all contending parties are published together in advance of general elections in the Netherlands, the Bureau offers a means through which all party proposals are treated on an equal footing, and are done so primarily in the interests of the electorate. A similar process exists in Australia, where costings can be provided for any party at any point by the Parliamentary Budgetary Office. In both the Netherlands and Australia, the costings are made independently, which contrasts with the current UK system.
In the UK, the Office for Budget Responsibility (OBR), the independent fiscal body, could serve a similar function. All parties’ policies might be fed to the OBR for their independent review. OBR expertise and judgement could then be used along with a uniform set of economic assumptions to produce a clear summary of the parties’ offers at any election. Starmer has already made a pledge to amend the legal framework governing the OBR to guarantee that where a fiscal event makes permanent tax and spending changes over a certain threshold, the watchdog can independently publish a forecast of the impact without being blocked. Starmer’s pledge was made in direct response to Liz Truss’ fiscal statement, whereby she blocked the release of the OBR’s independent analysis on her tax reforms. Extending reform of the OBR to include reframing the costings process in this way would allow the exercise to be outsourced to a fully independent body, and would put less pressure on civil servants to ‘fall in’ with ministers and have their costing outcomes fit a preconceived political agenda.
The second way in which the process might be reformed is for opposition parties to be allowed to ask the civil service for costings, in the same way that government ministers already do. This, however, might complicate the duty of civil servants who would find themselves in between two sets of political masters. Utilising the OBR, or creating a totally brand new independent financial body for the purpose purely of election costings, would be a more suitable endeavour.
Lastly, more could be done to build in constitutional safeguards to rebuke those parties, governing or not, who are clearly using the costings process for political point-scoring. In 2019, the former head of the civil service Mark Sedwill blocked a Conservative plan to use officials’ time to cost the opposition’s fiscal plans, on the basis that it would be too close to that year’s general election. The episode marked a clear intervention by a senior official to prevent mischief during the costing process. Bowler’s letter to the Opposition might be seen as a similar intervention on Sunak’s £2000 claim, but the figure continued to spread unchecked regardless. It would not be unreasonable to expect senior officials, including the Cabinet Secretary, to more forcefully call out election misinformation in the future.
Concluding remarks
One former head of the civil service has said that opposition projections were ‘one of the grubbiest processes’ he’d ever been involved in. As they stand, these costings exercises can be purposely misleading, and Sunak’s latest on the election trail is not the only recent example. Indeed, they are a recurring issue across successive governments, where the civil service is used to provide a veneer of authenticity to clearly political overtures.
There was a time, not long ago, when politicians stepped down when they misled voters and Parliament through the misquoting of statistics. In the absence of similar gestures, outsourcing processes like the costings projections to independent bodies may be one way to cut through the bluster of election hustings. Without reform, misinformation will likely continue to flourish around these figures. In time, this may lead to even more voters becoming disillusioned with the democratic process. That is something we should all seek to avoid.
Jai Jethwa.
Jai Jethwa holds a BA in Politics from the University of York. He has worked as a public affairs consultant and in the BBC’s central press office, as well as in the civil service in the Cabinet Office and the Department for Transport.
The Constitution Society is committed to the promotion of informed debate and is politically impartial. Any views expressed in this article are the personal views of the author and not those of The Constitution Society.