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Fiscal Charter

There is debate in Parliament this week about the Government’s proposed Fiscal Charter legislation and also about the Labour party’s alleged U-turn on supporting it, with a vote due today: I hope that the charter will be roundly defeated. My understanding is that the proposed Charter for Budget Responsibility would ties the UK Government to running a surplus budget although with the weasel-clause “when the economy is growing”. Apart from this loophole, I have two other questions about it.

Firstly, surely setting a budget is the responsibility of the elected government of the day? What this law would do is support the Tories in their present approach and tie up any future Government of any colour into the same direction of travel. I accept although I don’t like the fact that the Conservatives hold power until 2020 but I don’t understand what right they have to enact their current financial policy on future governments; after all, they don’t have an unequivocal record as financial geniuses in getting the economy and society on track over the last five years and they can’t lay the blame for that all on the Liberals.

Secondly, I can see that it would become a ready excuse for the present Government to cut more and more deeply into public services. “We have to,” they will say, “because it is the law”. I think that all members of other parties and right-thinking (rather than right-wing) conservatives should oppose this new charter. Decisions on spending – which deeply affect society as well as the economy – need to be subject to due democratic process and not forced by such rulings.

Maybe the Labour party should never have supported it but I am glad that the party’s present leadership is not afraid to consider matters and change its mind. Constancy is a virtue but so is flexibility; proposing the straitjacket of legislation does not indicate that the Conservative party deserves to be trusted.

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