Charter for Budget Responsibility

Chris Philp Excerpts

Wednesday 20th July 2016 Commons Chamber

[John McDonnell]

Let me just finish another paragraph before I give way again.

A new set of rules for fiscal policy is needed. I know that some Members have questioned the need for fiscal rules at all. During the discussions on the Fiscal Responsibility Bill in early 2010, I recall the right hon. Member for Tatton (Mr Osborne), who was then shadow Chancellor, saying that the Bill was a “completely feeble stunt” and the

“biggest load of nonsense that this Government have had the audacity to bring to Parliament in this Session”.—[Official Report, 5 January 2010; Vol. 503, c. 72.]

That was the then shadow Chancellor condemning Gordon Brown for having a fiscal rule. A short while later, when he became Chancellor of the Exchequer, he produced his own fiscal rule: the fiscal responsibility charter. He missed every target in his first charter, so he brought in a second one. He was on course to miss the targets in his second one, so he brought in a third.

[Chris Philp (Croydon South) (Con)]

The shadow Chancellor has just questioned the performance of the economy under the fiscal rule, but is it not the case that the deficit fell from 11% to 4% of GDP, that the economy created 2.6 million jobs—more than in the rest of Europe put together—and that the employment rate increased by 4% and now stands at the highest level in our country’s history? Is not that evidence that the approach of the last Government worked and should be continued?

[John McDonnell]

I remind the hon. Gentleman that under his own Government’s fiscal rule, the deficit should have been completely eliminated last year, and debt should have dropped but it has increased. I will send him a reading list.