What is the costing of opposition policies?
Opposition parties often announce policies they would pursue if in power. In some instances, parties will publish their own assessment of the cost of those policies or the revenue they would raise, but this does not always happen.
The ‘costing of opposition policies’ refers to the process whereby civil servants will produce assessments of the costs and financial implications of policies proposed by opposition parties.
This has been carried out in one form or another since at least the 1950s, by both Labour and Conservative governments, often in advance of general elections. For example, between January 2008 and January 2010, the Labour government asked the Treasury to undertake 38 costings of Conservative policies (although only around half were completed). 4 HM Treasury, ‘Work on costing opposition parties’ policies’, 17 February 2010, retrieved 31 October 2023, www.gov.uk/government/publications/work-on-costing-opposition-parties-policies
Why is the government allowed to ask the civil service to do this?
Government ministers can ask civil servants to ‘cost’ policies proposed by opposition parties. This is usually co-ordinated by the Treasury, with the chancellor directing officials on which policies to look at. Other government ministers can ask officials in their own department to do the same, but any resulting figures must then be agreed with the Treasury.
All government policies are costed prior to announcement and MPs or peers, of any party, can request factual information on these costs via parliamentary questions. This means the opposition can in effect ask that civil servants produce costings for government policies, so successive governments have held the view that they should be able to ask for the same of opposition policies.
This applies to all opposition parties – for instance the UK government has used this process to cost policies from the Scottish National Party, who are also in government in Scotland; prior to the 2015 general election the Treasury was asked to cost the possibility of “full fiscal autonomy”, a central SNP policy.
It is only government ministers, not special advisers, that can formally request that the Treasury cost opposition policies.
How does the process of costing policies work?
Officials need policies to be clearly defined to cost them. Not all pledges made by opposition politicians are, so in these cases ministers – usually through special advisers – define the parameters of the policy to enable officials to cost it. The Directory of Civil Service Guidance published in 2000 describes this process as ‘identifying the text of commitments together with any further interpretations or assumptions necessary to allow the commitments to be costed’.
The aim is that impartial civil servants should not have to make assumptions. This also means that if the opposition objects to the assumptions made about the policy, it is clear that they were political decisions made by ministers. The template for requests for opposition costing requires requests to include additional policy assumptions and additional technical modelling assumptions required.
When are these costings done?
Costings can be requested at any time by the government except during an election campaign.
Election campaign restrictions on government activity aim to ensure that the impartiality of the civil service is maintained during the campaign period, so using official resources to support the governing party’s campaign is forbidden. These restrictions stem from historic convention, set out in the Cabinet Manual and in guidance issued before every general election.
However, there has been some controversy about how close to the formal start of an election campaign requests for costings should stop. In the lead up to the 2015 election, Treasury costings were published up until three days before the dissolution of parliament. On 6 November 2019, the then cabinet secretary, Mark Sedwill, refused to publish costings of proposed Labour policies as it was just hours before campaign restrictions began.
The reason for this is the ‘period of sensitivity’ that guides civil service restrictions usually starts before the formal dissolution of parliament and the formal campaign period.
What criticisms have been made about these costings?
The costings process has been criticised in the past. On the timing of costings too close to an election of a referendum campaign, inappropriate requests can put the civil service in the difficult position of having to refuse ministers; conversely, by agreeing to late requests from ministers, the civil service also risk looking to the opposition like they are politically biased towards the governing party.
They have also been criticised over when opposition parties have felt that policy assumptions used to calculate the policy costs were politically biased.
In 2015 Labour refuted a costing produced by the government, which suggested that their manifesto included £21 billion in unfunded policies. Labour’s argument was that ministers were making assumptions with the aim of producing the highest cost estimate.
How do other countries approach costing parties' policies?
Several other countries offer more wide-ranging assistance for policy costings than the UK. In Ireland, all parties have their policies costed by the Department of Finance before an annual budget, ahead of an election and during negotiations for government formation. These are done anonymously and are then sent back to the parties who can choose whether or not to publish them.
In Australia, costings are provided by the Treasury and Finance departments, or the independent Parliamentary Budget Office. The former only do this ahead of a general election and make them public, but the Parliamentary Budget Office will do costings at any time for any party confidentially.
In the Netherlands, the Central Planning Bureau (CPB) also offers political parties the opportunity to cost their policies. This is a far more extensive process, using models and information from delivery bodies to calculate not only budget consequences but also macro-economic impacts. This process is voluntary, but as all costings are published together in advance of the election there is a strong impetus for parties to take part.