Wednesday, November 18, 2009

With Great Love And Respect

We'll pass an Act - problem solved

Queen's fairytale day again. And the centrepiece this year is reportedly a Fiscal Responsibility Act, which will impose a legal requirement on government to cut the budget deficit.

So what happens if they don't? Personal fines for backsliding spending ministers? Jail for the Chancellor?

Yes, you guessed it - there are no legal sanctions at all. This shocking bunch of busted shysters reckons we'll believe yet another promise to go straight simply because they've framed it as a law (cf their laws to outlaw child poverty, reverse global warming, ensure universal happiness, etc etc).

What a joke. As BOM's old friend the Prof says:
“Fiscal responsibility acts are instruments of the fiscally irresponsible to con the public.”

The Director of the Institute of Fiscal Studies says:
“It is not obvious why anybody should be more persuaded by this than they ended up being impressed by the Code for Fiscal Stability which was enshrined in statute with much fanfare in 1998.”

When Evan Davis tackled Mandy about this on BBC Today, the old queen was so empty handed he was even driven to a "with great love and respect". All he could offer was a ludicrous claim that, although the intellectual elite might not be impressed - because, you see, they've got their own anti-Labour agenda - the Act was necessary to reassure the public. Apparently we peasants are so dumb we will still believe a Labour promise if it's dressed up as an Act of Parliament.

Look, we strongly favour explicit fiscal rules. The evidence from around the world suggests that governments are much more likely to maintain fiscal discipline if they announce upfront the quantified rules under which they will manage expenditure, taxation, and borrowing (the IMF is about to publish a new research paper on worldwide experience, which we will read and blog).

But to be credible the rules have to be in the hands of a government that demonstrates it will stick to them. And this government long ago demonstrated precisely the opposite.

Labour now has zero credibility. It is morally and intellectually bankrupt, and no amount of new Fiscal Responsibility Acts will change that.

We desperately need a fresh start under a new government with a clean new set of explicit fiscal rules. Yes, they will have to earn their credibility, particularly after Brown's abysmal performance. But credibility cannot be earned simply by passing another Act.

PS The Major wants to know if he's still in the real world, or whether he slipped away peacefully during the night. According to him, the BBC has just appointed Gordon the Gopher as its head of compliance on £110k a year. So the man that used to make a living by pushing his hand up Gordon's bottom is now in charge of taste, decency and balance at our state broadcaster. Come to that, Tyler is beginning to doubt his own presence among us. How do you tell if you exist, again?

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