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Let's Get Fiscal : Relaxing The Fiscal Rules

Jul 23, 2008
It seems to me that, for large swathes of the public, the two "fiscal rules" that govern economic expenditure are, if not totally incomprehensible, at least too shatteringly dull to care about. One states that borrowing should not exceed the bracket of 40% of GDP whilst the other, the 'golden rule', refers to the balancing of the budget over the economic cycle.

It's not exactly Bad Boys II is it? For the past 11 years these Brownite commandments have largely gone undisturbed. However, with financial storm clouds gathering overhead, it looks like they might not be as perennial as people thought.

The problem with this, naturally, is that if someone starts moving the goalposts, it somewhat throws the match into disrepute. The Conservatives, as one might expect, are practically queuing up to attack the Treasury over the issue. "The last nail in the coffin for Brown's reputation for prudence" they're calling it. The shadow chancellor George Osbourne, for example, rather sniffly referred to Brown "giving the prisoner the keys to their own cell"

A couple of rather adroit analogies aren't they? Well, yes, until you read what Cameron said about these 'fiscal rules' at his party's economic summit only two days previously:

"I don't believe it's impossible to try to get some political consensus [with the government]...about tight rules on fiscal policy"

That's how he decided to phrase his intentions for steadying up the economy. Elsewhere he claimed that he wanted to "Reform the fiscal architecture" Which sounds remarkably like the way Kevin McCloud might describe Labour's policy of 'relaxing the fiscal rules'

Of course, as the old saying goes, the duty of the opposition is to oppose, but to describe Brown (and invariably it is Brown and not the Treasury or Alistair Darling... I wonder why?) as some prodigal cad and then hint at proposing the exact same measures is pretty rich isn't it?

Many financial commentators have described Brown's cabinet as standing at a crossroads with this issue. Either, they tighten their belts, raise taxes and feel the brunt of public unrest, or they slacken their belts, throw caution to the wind and indulge in a little more borrowed cash. The choice, clearly, is a tricky one:

ROCK: Oi! Brownie! How can you justify sticking to a set of outdated rules that will unnecessarily burden the public?

HARD PLACE: Oi! Gordon! where do you get off talking about borrowing more money when the financial situation is in such trouble?

Still, I suppose either of the two main positions are better than what Nick Clegg's thrown into the mix. His 'fair tax' party has done somewhat of a u-turn of late and are now saying that they can solve the sticky economic climate by... lowering taxes.

Mmmm...? Well, we'd all like to see how that plans out wouldn't we Nick? Sure you've thought this one through? Because I find it very hard to believe that every other economic advisor has dropped the proverbial clanger and forgot to add up these huge sums of money that are secreted around the different nooks and crannies of public spending. Brown doesn't keep a penny jar does he?

So what have we learnt? That the government is in trouble; that the opposition will belligerently scratch and claw at everything the cabinet say, and that Nick Clegg could feel the benefit of a nice sit down. Well what's new? Of course, detractors will rally around to call this the 'end of the Brown era of economics' but that only matters if you believed in such short-sighted spin in the first place.
About the Author
Samantha is a London theatre fanatic and regular West End theatregoer. She writes and researches some of the biggest London shows you can view examples of her work here Oliver and Show and Stay.
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