Institute clear fiscal rules with expenditure targets - 1/5

January 07, 2015 3:08 PM

Shortly before the last General Election, the TaxPayers’ Alliance produced a manifesto. Here is the latest in our series of posts looking at how the Coalition Government has performed in relation to our recommendations.

The full TaxPayers' Alliance manifesto can be found hereClick here to see the full series of posts.

George Osborne announced two fiscal rules right at the beginning of the Parliament. One for debt and one for the deficit. The debt one said that its ratio to GDP should be falling by 2015-16 while the deficit one says the cyclically adjusted current account should be in balance over the following five years, which are always refreshed each year.

These rules were arguably better than nothing but are inadequate. The hard work is always deferred to another day, leaving taxpayers on hook now with nothing but the promise of spending-restraint-jam tomorrow to keep us happy. The Chancellor has since updated his rules with tweaks such as changing the horizon from five to three years, but we still don't have the expenditure rules which would protect taxpayers.

In mitigation, he has established the Office for Budget Responsibility which despite often getting its forecasts wrong nonetheless instills a measure of discipline to the Treasury and the wider debate.

So, because they did introduce some fiscal rules and the OBR, and because they were inadequate and not terribly clear anyway, we think they deserve one out of five on this.

Latest Blogs:

TaxPayers' Alliance Icon

How should we fund social care?

10:43 AM 20, Jan 2017 Alex Wild

TaxPayers' Alliance Icon

We're hiring a Campaign Manager - Digital

11:37 AM 16, Jan 2017 The TaxPayers' Alliance

TaxPayers' Alliance Icon

Increases in precepts are not the answer

3:30 PM 13, Jan 2017 James Price

TaxPayers' Alliance Icon

We must all stand up for a free press

10:39 AM 06, Jan 2017 Dia Chakravarty

TaxPayers' Alliance Icon

Want to be our new Policy Analyst?

12:52 PM 05, Jan 2017 The TaxPayers' Alliance