Thursday, October 15, 2015

The Fiscal Charter is a 2-fingered gesture to democracy

The Labour mess over the Fiscal Charter has rather obscured any rational debate about its suitability in a democracy. I start from a position in which I believe that a budget surplus (on revenue and current expenditure) is a good thing. Debt financed current expenditure is, in my opinion, generally a bad thing. Anyone sitting in my house will probably have heard my rants at the television each time an advert is shown for loan companies offering cash to spend on the things people can't afford. Whether it's private or public current expenditure, debt in my opinion is a bad thing, surplus is a good thing.

Whilst the Fiscal Charter sets out to establish a system in which a budget surplus is the norm in years of growth, it is also an arrogant act by the Conservatives to expect all future governments to abide by their policy. Whilst I would be very unhappy with a government that engages in deficit financing during good times, it is for that government to decide its own policy. George Osborne is Chancellor until such time as he moves to another government role or is removed from his post due to Prime Ministerial discontent or loss at an election. He is not permanently the Chancellor. It is for future government's to decide their fiscal policy, not George Osborne.

In effect, the Fiscal Charter is a 2-fingered gesture to democracy. It is also a stunt that has needlessly tied up Parliamentary time. After all, a future government can legislate for its own budgets and simply dismiss the Fiscal Charter as and when they wish to. It is therefore all the more remarkable that Labour should have initially supported it. Whilst being a complete shambles following their u-turn is entertaining for some, it is hardly the springboard to electoral success that Corbyn and McConnell need. But it is possibly the basis on which the Conservatives can arrogantly presume they will be in power for some time to come.

No comments: