‘Fiscal lock’ lacks oversight of changes to tax and spending rules, Tories claim
Jeremy Hunt said the Government could still ‘fiddle the fiscal rules’ without extra oversight from the independent Office for Budget Responsibility.
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Your support makes all the difference.Plans to ensure the Government consults a watchdog before making major tax and spending changes still leave Labour room to “fiddle the fiscal rules”, Tories have claimed.
The Budget Responsibility Bill returns to the Commons on Wednesday and ministers say it will create a “fiscal lock” to ensure such policies are subject to an assessment by the independent Office for Budget Responsibility (OBR).
But the Conservatives claimed Labour would still be able to change how the fiscal rules governing public spending and tax operate without additional oversight from the OBR.
As the Commons continues its scrutiny of the Bill, shadow chancellor Jeremy Hunt will table an amendment aimed at ensuring the OBR provides analysis of “any changes to the Government’s fiscal targets”.
The current fiscal rules were set by Mr Hunt’s Conservative Party when it was in power, and include ensuring that national debt is falling as a percentage of national income within five years.
Mr Hunt urged ministers to back his change to the Bill, saying: “If Labour fails to back this amendment it will confirm that the Chancellor is planning to fiddle the fiscal rules, leading to a massive increase in borrowing and debt with hardworking taxpayers left to pick up the tab.
“As with their plans to raise taxes, these are changes they planned right from the beginning, but simply did not have the courage to tell the British public about during the election.”
The Liberal Democrats tabled what they dubbed the “Kwarteng amendment”, named after former Tory chancellor Kwasi Kwarteng.
He delivered Liz Truss’s mini-budget during his stewardship of the Treasury, which resulted in market chaos.
The pair ignored calls for an assessment by the OBR ahead of the announcement.
The Lib Dem amendment is aimed at giving the watchdog new powers to report the Government to its own ethics advisor if it thinks the Ministerial Code has been breached.
The party pointed to concerns it had previously raised in a letter to the previous government about Mr Kwarteng attending a Conservative champagne reception with hedge fund managers after the mini-budget.
Lib Dem Treasury spokeswoman Sarah Olney said: “For years the Conservatives allowed sleazy politicians to run roughshod over Parliament and the OBR. Now the Conservative Party is out of office, it’s time to truly crack down on sleaze in every part of public life.
“Kwasi Kwarteng clinking champagne glasses with bankers while snubbing the OBR around the mini-budget revealed his botched budget was simply not serious enough to be enacted.
“MPs have a chance to help clean up our politics and protect our economy today by voting for a Liberal Democrat amendment that would see the Government reported to the ethics adviser if there was foul play.”
A Government spokesperson said: “The Budget Responsibility Bill will ensure no government can make large-scale announcements of tax and spending without being subject to an independent OBR assessment.
“We saw the risks of doing that when the previous government announced £45bn of unfunded commitments in the Growth Plan.
“Our robust fiscal rules will ensure that the current budget moves into balance so that day-to-day costs are met by revenues, and that debt must be falling as a share of the economy by the fifth year of the forecast.“