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Reaction to Osborne's abandonment of budget surplus target
Commenting on the news that the Chancellor has abandoned his target to restore government finances to a surplus by 2020, Ryan Bourne, Head of Public Policy at the Institute of Economic Affairs has said:
“Abandoning the aim of hitting a surplus by the end of Parliament should under no circumstances be interpreted as an excuse to relax government spending further.
“Overall spending in real terms fell just 2.3% in the last Parliament and in the current Parliament, real spending was expected to be essentially flat. The failure to fulfill the aim of fiscal balance a full 12 years after the financial crisis by 2020 will reflect the glacial speed of deficit reduction even in years that the economy has grown.
“The details of George Osborne’s most recent fiscal framework were always highly questionable. Over the past six years his rules and targets have been wilfully changed often. We now need a new, credible, fiscal framework which can achieve medium-term debt reduction whilst being robust to the types of economic shocks we now face.”
Notes to editors:
To arrange an interview please contact Nerissa Chesterfield, Communications Officer: nchesterfield@iea.org.uk or 020 7799 8920 or 07791 390268
The mission of the Institute of Economic Affairs is to improve understanding of fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
The IEA is a registered educational charity and independent of all political parties.
“Abandoning the aim of hitting a surplus by the end of Parliament should under no circumstances be interpreted as an excuse to relax government spending further.
“Overall spending in real terms fell just 2.3% in the last Parliament and in the current Parliament, real spending was expected to be essentially flat. The failure to fulfill the aim of fiscal balance a full 12 years after the financial crisis by 2020 will reflect the glacial speed of deficit reduction even in years that the economy has grown.
“The details of George Osborne’s most recent fiscal framework were always highly questionable. Over the past six years his rules and targets have been wilfully changed often. We now need a new, credible, fiscal framework which can achieve medium-term debt reduction whilst being robust to the types of economic shocks we now face.”
Notes to editors:
To arrange an interview please contact Nerissa Chesterfield, Communications Officer: nchesterfield@iea.org.uk or 020 7799 8920 or 07791 390268
The mission of the Institute of Economic Affairs is to improve understanding of fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
The IEA is a registered educational charity and independent of all political parties.
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