The more I think about it, the more I am coming to the conclusion that the Fiscal Responsibility Bill that was outlined in Labour's Queen's Speech yesterday is actually a landmine set to go off under a potential future Tory government. The bill will say that the deficit must be halved in the next four years, by law.
Thursday, 19 November 2009
Yesterday I was saying it seemed bizarre that the government would feel the need to try and put a legislative lock on itself like this and that it would appear to be more to do with sending a signal to the markets because Labour knows that it cannot be trusted and has moved the goalposts before.
However I think there is more to it than that. Brown is nothing if not a political calculation machine. Ask yourself why the timeframe is 4 years. That would coincide roughly with when a first term Conservative government (were they to win the next election) would be getting into gear for a general election. If there is a law in place that forces them to have halved the deficit within 4 years then it will be difficult for them to get around this. I suspect they would want to try and do this anyway but Brown is trying to bind the hands of a successor parliament by passing this law and forcing this timeframe upon them. It would be politically very difficult for Cameron to rescind the law if he became PM. With the law in place, a Labour opposition would then be able to attack a Tory government for cutting spending and raising taxes, even though they would have had to do exactly the same. The political capital they probably reckon they could make out of this could be considerable even if the Tories were to hit the target in that scenario. If they don't hit it the Labour could use that against them too insisting that they would have done "look, we even legislated for it - of course we would have done it" - I can hear Labour spokespeople now.
In my view there is no more eloquent statement that Labour think they will lose the next election than this bill.
Brown's ministers looked silly yesterday trying to defend it. It does not serve any real purpose other than as a political landmine for a future government. This is Brown at his worst. Calculating, scheming, using legislation as a trap for his political opponents. He has learnt nothing from his failed previous attempts to do things like this (e.g. 10p tax rate abolition).
Although I suspect some of yesterday's bills will not make it onto the statute books you can bet your bottom dollar that the Fiscal Responsibility Bill 2010 definitely will.