Bob Kerslake to carry out Treasury review for Labour

Former head of the civil service asked by Labour to "review the operation of the Treasury itself" – as shadow chancellor John McDonnell signals major shift in the opposition's economic policy

By matt.foster

28 Sep 2015

Former civil service head Bob Kerslake is to carry out a review of the Treasury on behalf of the Labour party, it has been announced, as the opposition's new economics spokesman vowed to reject austerity.

Speaking at the Labour party conference in Brighton on Monday, shadow chancellor John McDonnell said Kerslake had been asked to "bring together a team to review the operation of the Treasury itself", as part of a wider look at the role of the state in economic life.

"I want us to stand back and review the major institutions that are charged with managing our economy to check that they are fit for purpose and how they can be made more effective," McDonnell told conference.

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The announcement of Kerslake's appointment drew cheers from conference delegates. Kerslake stepped down as head of the civil service in 2014 after two years in the job, and in February also retired as permanent secretary at the Department for Communities and Local Government.

Since leaving Whitehall, the crossbench peer – who is now chair of the Peabody housing trust – has been a vocal critic of the government's plans to extend the Right to Buy policy to housing association properties. Kerslake on Monday confirmed that he had accepted McDonnell's invite and promised more detail on the precise nature of the review would follow soon.

McDonnell was handed the shadow chancellor job earlier this month by the party's new left-wing leader Jeremy Corbyn, and has vowed to oppose austerity in favour of public investment.

"Austerity is not an economic necessity, it’s a political choice," McDonnell said. "The leadership of the Conservative Party made a conscious decision 6 years ago that the very richest would be protected and it wouldn’t be those who caused the economic crisis, who would pay for it."

As well as the Treasury review, the shadow chancellor pledged to look at "the operation and resourcing" of HM Revenue and Customs, and promised that the party would change the role of the Department for Business, Innovation and Skills to focus on "public investment, infrastructure planning and setting new standards in the labour market".

He also vowed to "guarantee" the independence of the Bank of England, but said Labour would consider handing the central bank's Monetary Policy Committee new objectives including "growth, employment and earnings".

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