Treasury refuses to supply papers

SIR TERENCE BURNS, the Treasury's permanent secretary, has refused to supply any background papers of fact or analysis behind the decision to join the European exchange rate mechanism despite a government promise of more openness.

Sir Terence was asked by the Independent to make available information on the ERM and other key economic issues in line with the new policy on official secrecy announced by John Major, the Prime Minister, in May.

The Treasury was asked for information '. . . relating to our decision to join the exchange rate mechanism; the underlying trends in public expenditure by programme; the outlook for inflation including pay settlements and the June forecast when it is complete'.

However, Sir Terence's reply dated 8 July cites a long list of already published material in a way which makes clear that the key Whitehall department has no intention of releasing internal studies which would reveal the nature of policy debates.

Sir Terence writes that what the Treasury can publish is frequently limited by market sensitivity and the 'continuing need for confidentiality over certain aspects of government economic policy, particularly the advice given by officials to ministers and the exchanges between ministers prior to the taking of decisions'.

Sir Terence said it would not be 'constructive' to publish the Treasury's views on the outlook for pay settlements, largely because government figures might constitute a floor for expectations.

Similarly, Sir Terence refused to say anything about the inflation outlook except that there was no reason to believe the March forecast was off track, even though Alan Budd, the chief economic adviser, has recently prepared an optimistic internal paper on the subject.

The permanent secretary also refused to make available, in addition to the March and November forecasts, the internal June forecast, which has just been delivered to ministers. 'We are concerned that making more forecasts available would serve to exaggerate their importance', he said.

However, Sir Terence goes on to imply that the forecast is indeed important: 'The main purpose of the June forecast is to inform the Government's public expenditure survey internally. It includes market-sensitive material, and we do not think it is justified to convert the analysis in the internal forecast into a form suitable for publication'.

Sir Terence began his letter by saying that the Treasury ministers fully support the trend towards greater openness in the way in which the Government conducts its business, and the principle of open government.

'In keeping with this, the Treasury has been making available an increasing volume of material about the factual and policy analysis underlying our work. Besides regular Treasury publications, such as the Autumn Statement and the 'Red Book', and White Papers, such as the recent one on budgetary reform, the select committees are an important channel.'

Mr Major's pledge of greater openness first came in the Conservative Party's manifesto. It said that 'government has traditionally been far too reluctant to provide information . . . We will be less secretive about the workings of government'.

It also promised to review 'statutory restrictions which exist on the disclosure of information'.

According to the then prime minister, James Callaghan, the Croham guideline was to 'publish as much as possible of the factual and analytical material used as the background to major policy studies'.

The Treasury's response is broadly in line with that of other departments which have been asked for information. The Ministry of Defence, asked for background information on regimental mergers, sent a two-inch file of previously published material.