by Stephen Tall on July 18, 2008
A sign that politics is now all about the economy is that a story with words ‘fiscal rules re-writing’ can lead the morning news bulletins. This from the BBC:
The government is considering re-writing its own rules on how much it can borrow in order to counter the effects of the economic slowdown.
The new framework, which could be announced in the Autumn pre-Budget statement, would permit more borrowing as an alternative to increasing taxes. … the Treasury stressed no decision had yet been taken.
The Lib Dems’ shadow chancellor Vince Cable has once again called on the Government to place its fiscal rules in the hands of an independent body to avoid suspicion of expedient political meddling. Speaking on BBC Radio 4’s Today programme this morning Vince slated Mr Brown’s latest ploy to creatively account for an £8bn tax revenue shortfall: “It is embarrassing and almost humiliating for the government.”
Here’s Vince’s official statement:
The fiscal rules have no credibility when the Government keeps fiddling or changing them. This step underlines what I and my colleagues have said for years, the assessment of fiscal policy must be made by an independent body in the same way interest rates are determined.
“It’s completely lacking credibility for the Treasury to be marking its own exam papers and setting its own questions. What we need is an Ofsted for the economy.”
(Though I’m not entirely convinced that creating “an Ofsted for the economy” is one of the most convincing arguments I’ve heard).