Liberal Democrat thinkers argue it’s time to reform the Treasury

Monday 6 October 2014
Paul McNamee Paul McNameeHead of politics020 7630
Short term thinking by the Treasury is damaging UK environmental policy, according to senior Liberal Democrat MPs and thinkers [1].

A new Green Alliance [2] pamphlet, published today, argues for changes to the way the government’s most powerful department operates, to enable proper consideration of long term economic risks to the UK economy. It highlights that short term analyses and overly generous discount rates characteristic of current Treasury practice, are failing to take account of the impacts of climate change and other long term threats to economic security.

Three possible ways to reform the Treasury are considered: 
·    Breaking up Treasury: creating a finance ministry to ensure the health of public finances, and extending the power of the Department for Business, Innovation and Skills to control longer term economic strategy. 
·    Changing the Treasury: giving the Treasury a clear objective in its business plan to ensure a low carbon economy, championed by a junior minister and adopting a longer term budget horizon; reviewing the way it accounts for the costs and benefits of environmental policies; and becoming more transparent about its analysis of environmental issues.
·    Making the Treasury more accountable: setting up a new office for environmental responsibility to review the suitability of current policies for environmental impacts like climate change, water and air pollution, with the chancellor expected to report against the Treasury’s environmental objectives. 

“Treasury orthodoxy has long been a barrier to holistic policy making, regardless of which parties are in government. It’s time that narrow approach is challenged, to allow a wider assessment of long term costs or benefits and help build a more sustainable future.” Duncan Hames MP

“It has been said that the Treasury knows the price of everything and the value of nothing. While neither of these is quite true, it does focus too much on the next few years, to the neglect of the next decades; it is time to change that.” Dr Julian Huppert MP

“The Treasury has a crucial role to play in the UK’s transition to a sustainable, low carbon and resource efficient economy, but at present its role is almost entirely negative. This welcome pamphlet sets out the options for reforming the Treasury which should be debated as a matter of urgency.” Duncan Brack, former special adviser to Chris Huhne and vice chair of the Liberal Democrat’s Federal Policy Committee 

Green liberalism: reforming the Treasury for long term policy is a publication from the Green Roots programme, exploring environmental challenges from the perspectives of the three main political traditions in the UK.

Green conservatism: better resource productivity for a resilient economy and Green social democracy: building a public mandate for infrastructure have been published over the past two weeks. 

For more information, contact Alastair Harper on , or 07903966635


Notes to editors

[1] Advisory group members include Baroness Parminter, Duncan Hames MP, Giles Wilkes, Andrew George MP, Martin Horwood MP, John Pugh MP, Adrian Sanders MP, Andrew Stunnell MP, Lord Teverson, Julian Huppert MP, Duncan Brack, Neil Stockley, Cllr Keith House and MikeTuffrey.

[2] Green Alliance is a charity and environmental think tank focused on ambitious leadership for the environment.

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