David Green

Jacob Rees-Mogg’s criticism of the Treasury doesn’t go far enough

Jacob Rees-Mogg's criticism of the Treasury doesn't go far enough
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Treasury civil servants have been getting indignant about the suggestion by Jacob Rees-Mogg that their reports have been biased in favour of EU membership. But are they protesting too much?

As it happens we have a recent example of what a genuinely independent study by the Treasury looks like. Between 1999 and 2003, HM Treasury evaluated the five economic tests set by the government to determine whether or not the UK should join the euro. Officials drew on expertise and research from around the world in a spirit of open debate, and published the results in stages, before taking the decision. In a lecture to the Mile End Group at Queen Mary University of London in 2013, the process was described by David Ramsden, the economist who supervised the work. It is available to watch on YouTube. Later David Ramsden become chief economic adviser to HM Treasury and in 2015 he was knighted.

In 2016, the Treasury took part in the debate about membership of the EU in a very different spirit. Its reports were not open-minded, and showed little sign that any effort had been expended to discover independent expert  opinion. As the work on the euro between 1999 and 2003 reveals, the Treasury knows perfectly well how to conduct independent research. When appraising our membership of the EU it chose a different approach.

Worse still, the Treasury ignored its own recently-published guidelines on the conduct of independent evaluations. In 2011, the Treasury published The Magenta Book: Guidance for evaluation. Earlier, in 2003, it had published The Green Book: Appraisal and Evaluation in Central Government. The foreword to The Magenta Book says that its aim is to ensure that ‘policy is based on reliable and robust evidence’. It continues:

‘HM Treasury’s Green and Magenta Books together provide detailed guidelines, for policy makers and analysts, on how policies and projects should be assessed and reviewed. The two sets of guidance are complementary: the Green Book emphasising the economic principles that should be applied to both appraisal and evaluation, and the Magenta Book providing in-depth guidance on how evaluation should be designed and undertaken.’

Any objective observer who looks at the Treasury forecasts for growth in various scenarios after we leave the EU and compares the methods used with the approach to evaluation recommended by The Green Book and The Magenta Book would conclude that, if anything, Jacob Rees-Mogg has been restrained in his criticism.

David Green is Director of Civitas