Open Letter to the OBR and the IFS

The mission statements of the Office for Budget Responsibility (OBR) and the Institute for Fiscal Studies (IFS) are as follows:

  • OBR: The Office for Budget Responsibility was created in 2010 to provide independent and authoritative analysis of the UK’s public finances.
  • IFS: Our goal at the Institute for Fiscal Studies is to promote effective economic and social policies by better understanding how policies affect individuals, families, businesses and the government’s finances..

Between them (and together with the ONS), these organisations are the most reputable bodies for promoting reliable data and analysis on government expenditure and income in the UK. As such they share responsibility for the quality of public understanding of these matters and the accuracy of political debate surrounding them.

There follows the text of an open letter, sent today to Robert Chote, Chairman of the OBR, and to Paul Johnson, Director of the IFS:

Gentlemen,

Sharing as you do, directly and indirectly, responsibility for the quality and accuracy of public understanding and debate concerning government income and expenditure, I am writing to you with a simple suggestion. It is that you should create and publish, on your respective websites, a ‘ready reckoner’ that would enable everybody to see, and quantify, the impact of a wide variety of potential changes in government taxation and expenditure.

Public, and especially political, debate on these matters is conducted very much ‘in the dark’. Ordinary folk, voters, have no reliable way of assessing claims made by politicians; journalists and commentators query such claims somewhat lazily with a standard ‘how are you going to pay for it?’ response; election manifestos are published with policy promises either unquantified or obscurely ‘costed’; voters and members of the public have no readily available means of quantifying the impact of their own ideas about taxation and expenditure. The net effect of all this is an unnecessary degradation of public understanding and discussion.

The technology now exists for all of this to be put on a more objective, quantifiable and, perhaps most importantly, trusted basis. A perfect, all-encompassing solution does not need to be created at the first pass: general ‘headline’ categories for tax and expenditure would represent a big step forward. How much Education or Health expenditure does a penny on income tax or national insurance buy? How much social care does a 20% reduction in Foreign Aid or Defence expenditure buy? What kind of reduction in income tax or VAT would abandonment of a nuclear deterrent enable? At present there is no trusted, publicly available means of answering these simple questions.

Over time, models could be adapted to become more sophisticated and drill down into more detail, enabling academics and researchers to devise and test policy choices more securely and much more quickly. Judicious reliance on front-loaded design effort would enable rapid upgrading and mean that core data would be pulled automatically from trusted (ONS) sources, so that models would update automatically as new core data became available. I imagine that much of the heavy lifting has already been done on this for the creation of various Treasury models.

In the longer run the process could be evolved to give detailed, quantifiable guidance within specific categories of government expenditure. Different allocations of expenditure within the larger categories such as health will lead to very different outcomes. Informed public discussion of the issues would be enabled by my suggestion, and lead to far better understanding of policy choices.

Progressive democratisation of data and choices can only possibly lead to more informed discussion and debate in the culture of our political economy. It is within your grasp to commence the process of bringing this about. The longest journey begins with a single step, and making your respective websites the ‘go-to’ access point for a readily available application that opens up the ‘ready reckoner’ that I propose would be a great leap forward.

I hope you will be able to respond positively to my suggestion.

Gerald O’Connell

Leave a Reply

Your e-mail address will not be published. Required fields are marked *