Labour yesterday signed up to the government’s new charter for budget responsibility, despite dismissing the coalition move as “a silly political stunt”.
The new rules aim to end the annual current structural deficit in three years, whoever wins the next election – and for debt to be falling as a percentage of GDP by 2016-17. Yet the move allows for the deficit to remain when infrastructure spending or factors deemed to be one-offs are included.
“A silly political stunt by George Osborne has totally backfired,” shadow chancellor Ed Balls said yesterday. “In the Budget, Osborne talked about a vote on balancing the overall budget. Now he and David Cameron have done a staggering U-turn on this vote and are proposing a vote on the current budget, excluding capital investment.”
A spokesman for the chancellor hit back, claiming the document replaced an older commitment and detailed coalition policy.
Meanwhile, a Liberal Democrat spokesman added that the Conservatives and Lib Dems could not agree on economic policy beyond 2017-18 as they had a very different approach to deeper cuts further down the line.
A Treasury spokesman last night accused Labour of being “shambolic” on the economy, adding that Balls said earlier this month he could not promise to cut the deficit any earlier than 2020.
Economists at the Institute for Fiscal Studies say the Tories’ plans would mean more cuts and less state debt.