This post draws upon a blog I wrote for The Reformer.
A few days ago I wrote about the lessons that can be drawn from the recent history of the UK’s fiscal rules. This post measures the Government’s new Charter for Fiscal Responsibility against them. The Charter sets out the Government’s fiscal rule and requires the Office for Budget Responsibility (OBR) to assess Budgets against it. The new Charter lightly updates the previous version in two ways:
- It requires the Government to forecast a cyclically-adjusted, current account surplus within three years, rather than the previous five years.
- Public sector net debt should fall as a percentage of GDP in 2016-17, a year later than in the previous Charter.
Now compare against the lessons from history.