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Cry freedom

Why recent revelations on tax credits must not lead to Brown closing up sources of information.

In the last two weeks, the Freedom of Information Act has allowed us to see how decisions made by the Chancellor on tax receive substantial civil service advice.

It demonstrates that Gordon Brown and his officials knew the risk of the policy of removing tax credits from pension dividends.

The Chancellor has sustained some damage and for almost the first time been forced on to the back foot to defend a policy.

But the fear must be that ministers will now seek to close access to information under the Freedom of Information Act. Indeed Constitutional Affairs Secretary Lord Falconer has in recent weeks been wondering aloud at the expense of such requests and the fact the act was meant to help the public, not simply provide stories for newspapers.

But here are a few arguments in favour of open access. The first is that it allows much better scrutiny of decisions. At the moment, the process of government is mostly obscured. Financial services policy has been the subject of countless mistakes, U-turns and unfair accusations which have politicised the policy-making process.

The Chancellor himself has delivered Budget speech after Budget speech shorn of most meaning except political point-scoring, with all the relevant material contained in the HMRC papers. That is where the real stories lie.

The Treasury itself goes out of its way to be uncooperative. The feeling is one of evasion, even if that is not the intention.

Brown has also massively abused Budget purdah. For weeks beforehand, portions of the Budget have been given away to favoured journalists. This is openness of a sort but it is skewed badly. Such pre-Budget leaks 30 or 40 years ago would have led a Chancellor to resign.

Second, the workings between the Treasury, Department for Work and Pensions and FSA also need better scrutiny. The impression time and time again is that the FSA and the DWP have been ignored and even bullied in countless policy arguments. These may include depolarisation, stakeholder and the farce of decision trees, Equitable Life and, most recently, closed occupational pension schemes.

Unfortunately, we do not know a lot of what goes on because of special pleading about how the regulator and Government must have privacy. But the impression we are left with is of a stitch-up, with the Treasury dominant.

The Government argues that it is elected and must fulfil its mandate and this takes precedence over many other arguments. But does that really go down to the level of an Office of Fair Trading referral which the Treasury knew would provide an excuse to depolarise the industry? Should it include imposing some ludicrous flow-charts that would never in a month of Sundays get less well-off people to save in a pension? Of course not.

This Labour Government did not seem to takes its mandate all that seriously when it abolished Serps, despite a manifesto promise not to. Finally, without open access to information, exactly what scrutiny are the Treasury, FSA, OFT and DWP under? It feels like very little. Select committees are underfinanced, understaffed and dominated by Labour majorities. A grilling from the committees may not be relished by ministers or senior FSA figures but what exactly do they uncover? The answer is probably not much more than being able to raise the profile of some issues.

This is not a slight to many dedicated MPs. They simply do not have the financing they need to do the sort of job a US Congressional hearing can do.

The Treasury also has an appalling record in answering questions posed by MPs in the House of Commons compared with other departments, with the Tories uncovering a huge list of questions answered by other departments which the Treasury refused to answer.

Finally, ministers are judged a success if there are no bad headlines. But in the last few years the DWP has launched a pension which failed to sell because the Government designed it badly and now plans another. The wrong advice was given to occupational scheme members and defined-benefit schemes began a very steep decline.

For all we know, these “successful” ministers were fiddling while Rome burned despite civil service and perhaps even FSA advice.

One final argument remains in favour of much more openness. The Bank of England has succeeded not just because of its independence but because the monetary policy committee minutes are published. Its members must stand by its decisions.

Similar openness might transform government. It would certainly transform the relationship between the regulator and the Treasury.

The instinct for Gordon Brown, who is likely to become Prime Minister in the next few months, must be to close up this source of information. If he was brave, he would extend it. Fewer mistakes would be made by his Government as a result but a move to open Government would be his biggest U-turn to date.


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