Osborne wants public finances law change
The Tories are looking to exploit their recent general election victory by implementing a law that will bind future governments to a budget surplus if the economy is growing.
Chancellor George Osborne, and the Tories as a whole, are clearly gleeful at the fact they managed to achieve a Commons majority last month and are looking to make life as difficult as possible for the Labour party during their honeymoon period in office. This new law being proposed by Osborne will make life very difficult for any future Labour government that aren’t committed to the austerity cuts of this Tory government.
Osborne believes that the “result of this recent British election – and the comprehensive rejection of those who argued for more borrowing and more spending – gives our nation the chance to entrench a new settlement…a settlement where it is accepted across the political spectrum that without sound public finances, there is no economic security for working people.”
He is to outline the plan to limit government to a balanced budget during his annual Mansion House speech on Wednesday.
The announcement has given rise to concerns over the national debt which has already doubled since the late 2000s financial crisis.
Meanwhile, a London-based economist has described the proposal as a political move aimed at undermining the Labour Party.
“It’s obviously move. The timing of this move is purely political… This will put the Labour in a very difficult position,” Marco Pietroboli, and economist from RM Wealth Management told Press TV on Wednesday.
The issue is set to dominate the Labour leadership election, with apologies, lessons learned and cuts to public services all mantras they will use.
But Danny Gabay, co-director of Fathom Consulting and formerly of the Bank of England, has criticized the move by George Osborne, saying that it made little economic sense. Gabay believes that "given that the last five years was the tightest fiscal settlement that we've seen in modern times... it was extremely hard on spending, and yet the level of debt continued to go up…you can sense his frustration, but does it make sense to take it out on the rest of us? No, not really."
With Labour in disarray and the Tories in a buoyant mood, Osborne knows that he needs to use this post election period to push through legislation and to harm Labour as much as possible.
LM/HA
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