UK lawmakers have attacked the International Monetary Fund for offering uninvited commentary to journalists on September’s disastrous budget without appearing before Parliament to discuss the matter.
(Bloomberg) — UK lawmakers have attacked the International Monetary Fund for offering uninvited commentary to journalists on September’s disastrous budget without appearing before Parliament to discuss the matter.
Harriett Baldwin, chair of the House of Commons Treasury Committee, said on Thursday that the Washington-based institution was in an “untenable position” by talking to journalists but “not being prepared to follow up with appearances before elected politicians.”
On Sept. 27, the fund criticized then Prime Minister Liz Truss’s tax cutting “growth plan,” urging the government to re-evaluate the measures and asserting the policies would widen inequalities.
The comments came in response to a press query and were signed off by senior officials. The UK government, a founding IMF shareholder, was not consulted. Commentators said it was treatment usually reserved for emerging-market nations.
Baldwin asked IMF staff to give evidence to the committee, but the fund has declined to do so. The budget backfired spectacularly, forcing the Bank of England to step into prevent a market meltdown and ultimately bringing down Truss’s government.
“I will continue to push for the top brass of the IMF to appear on the record before the Treasury Committee,” Baldwin said. “Otherwise they should simply restrict their comments to the formal reporting program and not give an interim running commentary to journalists.”
The IMF provided an approved comment to the committee on the Nov. 17 autumn statement, when the Chancellor unveiled £55 billion ($67 billion) of tax increases and spending cuts to stabilize markets and the economy.
“We welcome the Autumn Statement,” the IMF said, in comments that the Treasury Committee said were released “following pressure.”
The IMF continued: “The fiscal plan navigates well the difficult trade-off between fighting inflation and protecting household incomes in a recession primarily caused by the exogenous energy price shock.”
“As highlighted by the Office for Budget Responsibility, the outlook for the UK economy is sobering: for 2023, output is expected to contract and inflation to remain elevated.”
“The gradual phasing of the consolidation will soften the impact on growth and put the public debt-to-GDP on a downward path over the medium term. We welcome the government’s efforts to better protect the vulnerable and to prioritize education, health, and investment.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.