Fiscal responsibility-no choice

The name's Osborne: george osborne

The Guardian runs a piece this morning on George Osborne and his plans for an audit of the country's finances so that he can “begin the process of cutting public spending”, sounds good doesn’t it, and it makes George look as if he is on top of the game and is being pre-emptive and responsible.

The truth is that he has no choice; the ‘Fiscal Responsibility Act’ forces him to get his finger out and do his job.

Summary of the Bill

The Bill imposes a statutory duty on the Treasury to meet specific targets for the reduction of government borrowing and debt. The Government believes that this legislation demonstrates its commitment to ensuring the sustainability of the public finances.  The Bill gives Parliament a greater role in fiscal policy.

Key areas

The Bill requires the Treasury to make sure that:

• Government borrowing in each financial year between 2010/11 and 2015/16 is lower than the previous year, measured as a percentage of GDP
• Government borrowing in 2013/14 is no more than half its 2009/10 level. A draft statutory instrument made under the Bill requires borrowing to be no more than 5.5 per cent of GDP in 2013/14
• Government debt is lower in 2015/16 than in 2014/15, measured as a percentage of GDP

The Bill also requires the Treasury to report to Parliament in the Budget and in Pre-Budget Reports and to provide an explanation if the targets are missed.



So don’t get sucked in by the “Newlyweds” they have no choice, the only choice they do have is what they are going to do about taxes, indirect and direct, how much they are going to punish us for the politicians lack of control and foresight regarding the Economy.



Angus