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.
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.