Darling reads the last rites over the fiscal rules
Fraser Nelson 7:03pm
Alistair Darling has not set out a new fiscal framework in his much-delayed Mais lecture - but he has read the last rites over the so-called the financial rules. “To apply the fiscal rules in a rigid manner today would be perverse,” he says. Not to say impossible: the rules set a 40% limit on net debt and it was 43.4% last month. Instead there is assurance that “people should be in no doubt that Government will take the decisions necessary, to ensure sustainability in the medium term."
George Osborne – back in action, and with a major speech planned on Friday – has released other Brown quotes which pledge his rules were always and forever. Like: “at all times—now and in the future—we will never compromise our commitment to meet our fiscal rules and disciplines” (April 02).
We’ll get the new fiscal rules in the as-yet-unscheduled Pre-Budget Report which is likely to be choc full of Brownies – and may even mark the debut of Mr Brown’s new debt measurement “Public sector net debt (excluding Northern Rock)”. We’ll be waiting.
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Comments
hadrian
October 29th, 2008 9:12pmIn effect what he and Brown are doing is having us all continuing to live well beyond our means...how long can that be 'sustainable' to use the criterion of the Chancellor himself?
John Page
October 29th, 2008 10:22pmDebt is going to overshoot anyway, and embracing Keynesianism is the only intellectual defence for it the government has.
PSJ
October 29th, 2008 11:07pmHaving fiscal rules then breaking them during a recession is like going on a diet except at mealtimes.
Lord Elvis of Paisley
October 30th, 2008 1:20amIt's like the surgeon general handing out 20 B&H; to cancer sufferers.
mitch
October 30th, 2008 5:36amSo brown is spending Camerons money! surely this is theft?.
watch that currency plummet its down 13% just this month against the $.
DamnedAngry
October 30th, 2008 7:25amThe 'fiscal rules' have been the walking dead for a while now any way, with the fudging of accounting periods and off balance sheet debt from PFIs. Lying incompetent scum.
griff
October 30th, 2008 7:26amDid GB tell another couple of porkies at PMQs yesterday? He said interest rates [on Black Wednesday presumably]were at 18% and oil prices were recently at $150 a barrel.
Re interest rates see:
http://www.guardian.co.uk/business/2005/feb/13/economicpolicy.comment
which says not even at 15%.
Re oil prices I feel sure they didn't go higher than $140.
Victor, NW Kent
October 30th, 2008 7:50amWhy should I worry? My great-great-grandson will pay for this.
TrevorsDen
October 30th, 2008 9:01amThere is something "rotten in the state of Denmark" here.
In number terms our debt has risen - even in times of alleged 'growth'. Yet the govt are claiming it has repaid debt so we are 'well placed'. It does this on the basis of GDP.
Yet just how can this be? This very GDP is based on borrowing - so we borrow more to give bogus GDP and then claim borrowing is less as a %age of GDP?
Smoke and Mirrors?
And on top of this - thanks to mass immigration sources such is 'MigrationWatch' say GDP per head is static. Given this 'static' measure of GDP - just how relevant is Browns claim about debt levels?
It seems to me if we are truly to compare like with like we should asses what GDP growth would be without the increase in population. This I suggest would give a lower GDP figure, hence higher debt ratio.
I notice The Spectator' has a Business section --- maybe it should start to earn its keep ...
David C
October 30th, 2008 9:48amJohn Page:
Keynesianism would have been a good idea but Brown is seven years too late.
The economic philosophy requires a government to put aside money in the 'good years' - which is what Brown singularly failed to do.
I am afraid this new admiration for JM Keynes is mere expediency, something which characterises Browns premiership.
As chancellor, he had 'grand ideas' he wanted to enact, a long list of aims that he rammed through against the advice of older wiser heads.
We are witnessing the folly of prejudice made into policy.
RODEST
October 30th, 2008 11:59amIt was Browns fiscal rules that allowed personal debt in the UK to exceed £1Trllion. Adding this figure to government debt shows the real state of the economy.
Brown/Darling new fiscal rules will be more of the same and at enormous cost to the taxpayers.
History will repate its self, 1970 Ted Heath took over in the same economic circunstances.
hadrian
October 30th, 2008 10:23pmAs a firm believer in the leanest of lean governments I can only conclude Keyesianism will turn out to an abject disaster. Governments should stick to defence, policing, maintenance of standards of justice and punishment of criminals and the barest interference in anything else. Anything they take over a tenth of your income is state theft in my book.