It’s all quite simple, really – the Liberal Democrats, unlike Labour, were not going to fall into Osborne’s trap. Here is Tom Brake’s speech from last night’s debate:
The Liberal Democrats will not support the charter tonight. Whatever the machinations in the Labour party, our reasons for opposing it are clear: the charter is just as much about fantasy economics as was Labour’s magic money tree. We remain committed to abolishing the structural deficit by 2017-18, and to seeing debt fall as a percentage of GDP in the following years. We will not, however, abandon the critical need for continued investment in infrastructure, and we will ensure that our economy remains competitive in the medium and long term. We are for sound and stable economic policy—something that sadly has been abandoned first by the official Opposition and now by the Government.
The charter is a trap set for the Labour party into which it has fallen headlong, and I suggest that it is also a trap for the Government over which they risk tying themselves in knots. What will happen if the Chancellor discovers that the Government are on course to miss their surplus target but growth is just ahead of 1%? Which of his rules will he break? Economic credibility means that markets, businesses and other investors have confidence that the Government will do what they say, and the charter manifestly fails that test. We will vote no tonight because the charter will simply not work. Its purpose is purely political, and parliamentary time should not be abused in this way.
Two paragraphs of common sense. John McDonnell could learn from this.
The rest of the debate was simply the Tories making fun of Labour, the SNP trying to score political points off Labour and Labour being, what was it again, oh yes, embarrassing.
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10 Comments
Fantastic to see (all eight of…) us voting against this sort of crap. We may now be small in numbers, but we are playing a canny game here, and have set our own trap for Labour.
I will cut John McDonnell some slack on this. Yes he mishandled the response to a Tory political stunt, but so what? That doesn’t really matter.
What matters is the policy. What fiscal rule, if any, would he adopt? Gordon Brown’s Golden Rule wasn’t bad, when it was being followed, though it did target a current account surplus in the good times (while, rightly, allowing for borrowing to invest).
The difference on this point about borrowing to invest shows that the charter for budgetary responsibility during the coalition reflects the Lib Dem position and not the Conservative one. It was another win for us and for the country that has now been lost.
All notions of a fiscal charter are piffle-because it saus ‘normal times’ well politicians-being opccasionaly venal-can promptly decide that the particular time in which they live is abnormal-so the charter doesnt apply-thus it wont serve a ourpose for very long.
Corbyn and McDonell abstained on the fiscal charter in Janauray-ideology my backside!
@ Joe Otten
I agree with the thrust of Joe’s comments, but we still remain with the problem of how to find the so called efficiency savings £ 12 billion and rising in the NHS, the rising cost of adult social care given the demographics, the rising cost of obesity/drug/alcohol abuse again poised to be on epidemic level, and the £ 26 initial Trident costs in 1916.
Only the latter (Trident) could possibly be described as ‘an investment’ ……. and there is still some ambivalence in the party on this.
Clearly the whole picture of government expenditure is a tax raising issue and we need to address the reality of this.
PS. Good, to the point, speech by Tom Brake.
As has been pointed out repeatedly in other places, no UK Parliament can bind its successors. This piece of political nonsense can be swept away by an incoming government along with any other law. (Including ending devolution, fixed term parliaments, local government, trade rules the list is endless)This is precisely why we need a written constitution to lay down clearly who can do what in government.
Tom Brake made very good points but he didn’t use the killer argument that this law is meaningless because of parliamentary sovereignty /
“Our first job, however, is a difficult one. Balancing the budget. I did not come into politics to make spending cuts. But it is the only choice if we want to steer Britain out of the economic mess Labour made.” Nick Clegg, LibDem Conference 2010
Tom Brake, said Mr Clegg said the speech [above] ticked all the boxes in that it “reminded any doubters the reasons why we went into the coalition” while also setting out the early wins the party had struck in shaping policy. “The mood here is positive.” FT 20/09/10
“If we inherit a deficit in 2020, fiscal policy will be used to pay down the debt and lower the deficit bit at a speed that does not put into jeopardy sustainable economic growth. We’ll use monetary to stimulate demand where necessary.” John McDonnell, Labour Party Conference 2015.
“ [re the U turn from his statement to Labour Conference] Is that embarrassing? Yes, of course, but a bit of humility among politicians never goes amiss.
And where is your humility Mr Brake?
Both Labour and LibDems (minus the Orange-bookers in denial brigade) agree that it makes sense to invest in infrastructure. That clearly differentiates both parties from the Tories. Great. Progress. But this preoccupation with trying to discredit Corbyn when you are broadly on the same path will only confuse voters as to what the LibDems are saying. The money growing on trees nonsense, especially when the LibDems have no costed policies to support their investment plans is rather lame.
@Dave Orbison
The mess left by Labour was the result of the worldwide banking crisis not Labour economic policy. Lib Dems were enthusiastic advocates of public spending and the pre-crisis deficit was not abnormally high.
The Tory myth adopted by our party does it no credit.
Mick Taylor’s point is the key one. The “Fiscal Responsibility Charter” measure is utterly meaningless. The British Constitution does not provide for any form of entrenchment (thank goodness). Any measure can simply be repealed or amended by Parliament even without a change of government. Nor (I assume) is there any penalty for failing to meet the provisions of this “Charter” So this measure is merely a target and the question of the precise circumstances in which a deficit or surplus can be allowed is as always something which will be decided according to Events (dear boy!).
Charter just silly. Tom’s speech excellent.
Even pretending to restrict a Government’s ability to respond to a financial crisis is foolish.
Worrying levels of personal debt plus heavy reliance on China are not encouraging.
George Osborne is again deliberately using/confusing “Fiscal Surpluses” with debt…It’s just another step toward implementing the Tory dream of a low paid, compliant workforce….
Perhaps someone should ask him, if running a surplus is essential to reducing ‘debt’, why, for example, from 1971/72 until 1988/89 the UK government never ran a surplus. Yet, amazingly, debt/GDP, over the period, fell from 60.0% to 36.6%.?