George Osborne's Budget Responsibility Charter Is Being Widely Mocked

George Osborne's New 'Political Gimmick' Is Being Widely Mocked

George Osborne's new target for the next government to eliminate the deficit has attracted derision from Labour, Ukip and the Taxpayers' Alliance.

The Chancellor's "Charter for Budget Responsibility" would set a target to balance current spending by 2017-2018, which has been billed as an attempted "deficit trap" for Labour by trying to make them show how quickly they want to balance the books.

The derision for Osborne's charter may be unsurprising as the chancellor himself dismissed a similar fiscal responsibility act before entering government in 2010 as a "completely feeble stunt".

However, Labour pointed out the charter refers to the deadline being the third year of an undefined five-year cycle rather than a specific deadline, and said the party would back it as it matched their plans to balance the books as soon as possible. The charter itself was overwhelmingly approved by MPs by 515 votes to 18.

Shadow chancellor Ed Balls agreed with the Taxpayers' Alliance's caustic assessment of Osborne's fiscal responsibility act, whose chief executive Jonathan Isaby labelled it as a "meaningless political gimmick of the most transparent kind...that serves only to remind taxpayers how dramatically the Chancellor has missed his own original target".

Isaby went on: "Mr Osborne was right to call this legislative pantomime "vacuous" when it occurred in 2010, so it's deeply depressing he has decided to bring it back for a revival performance. If politicians spent half as much time explaining how they would cut the deficit as they do blowing hot air about it, taxpayers would have a lot more faith in Westminster."

See more on the General Election 2015

A spokesperson for the free market Institute for Economic Affairs think-tank told the Huffington Post UK: "No parliament can bind its successor and today’s Charter for Budget Responsibility is no exception. Acts such these are of little interest to the general public, the majority of which will take very little away from today’s debate. Politicians should stop trying to play political games and just get on with reducing government spending, as necessary.”

Meanwhile, Ukip MP Mark Reckless tore into Osborne for continuing on with Labour's "fiscal incontinence" in his management of the public finances. His party colleague Douglas Carswell took to his blog to mock parliamentarians for paying "lip service to balanced budgets without lifting a finger to make it happen".

"Had MPs been doing their job properly, perhaps they might like to impose a bit of real budget responsibility on ministers instead of merely taking about it."

Green MP Caroline Lucas tried to scupper the charter, arguing that "the Government’s austerity agenda is economically illiterate because public sector finances are not analogous to household finances, and therefore cutting government spending will not restore balance".

Speaking in the Commons, the chancellor received widespread support from his fellow Tories, and accused Labour of trying to “perpetrate a grand deceit on the British public”, pointing to analysis from the Institute for Fiscal Studies that suggested their plans could mean up to £170bn extra public borrowing by 2030.

He told MPs: “They are confirming what we know: that the Labour leader and the shadow chancellor would do it all over again – tax and borrow and spend their way into an economic crisis and let the British people pay the price.”

IFS director Paul Johnson said that the higher debt could leave less "room for manoeuvre" in any future economic crises, but warned that Tory spending plans would be hard to achieve.

Johnson said: "Under autumn statement plans, Conservatives could be cutting unprotected budgets by 26% after 2015-16, or an extraordinary 41% over the whole period from 2010.

"Even merely to meet their more modest fiscal target, these budgets would need to be cut by more than 15% after 2015-16. Labour would need to implement cuts of only 3%.

"All of this, of course, points to another big difference. If Labour is spending more - and if it doesn't raise taxes - it will be borrowing more and, perhaps more important, presiding over a greater burden of debt.

"The effect of this might be relatively modest in the short term, but borrowing as much as their rule would allow beyond 2020 would mean national debt about £170 billion higher (in today's terms) by the end of the 2020s than would be achieved through a balanced budget.

"So, even if Labour does keep spending cuts to a minimum over the next parliament, further tax increases or spending cuts might prove necessary down the line to reduce risks with the long-term state of the public finances further."

A Labour party spokesman said: "The figures in the Times headline are based on a ludicrous assumption about what Labour might do between 2020 and 2030. We have set out a tough but balanced plan to balance the books after the election. Nobody is setting out targets for future parliaments."

Close

What's Hot