Upon entering office, Osborne repealed the Fiscal Responsibility Act 2010 which set a number of sensible deficit reduction targets.
Let’s assess Osborne’s performance in meeting the targets set by the last government using figures from the Office of Budget Responsibility (OBR) – the organisation created in the legislation that repealed the Fiscal Responsibility Act.
The initial duties:
1) “The Treasury must ensure that, for each of the financial years ending in 2011 to 2016, public sector net borrowing expressed as a percentage of gross domestic product is less than it was for the preceding financial year.”
2) “The Treasury must ensure that, for the financial year ending in 2014, public sector net borrowing expressed as a percentage of gross domestic product is no more than half of what it was for the financial year ending in 2010.”
3) “The Treasury must ensure that public sector net debt as at the end of the financial year ending in 2016 expressed as a percentage of gross domestic product (centred on 31 March 2016), is less than public sector net debt as at the end of the previous financial year expressed as a percentage of gross domestic product (centred on 31 March 2015).”
Warren Buffet once boasted of his ability to end the deficit in 5 minutes:
“Pass a law that says that any time there’s a deficit of more than 3 per cent of GDP, all sitting members of Congress are ineligible for re-election. Now the incentives are in the right place.”
Food for thought!