Government's Fiscal Rules — new fiscal framework — rejected — 7 Oct 2008 at 18:41

The majority of MPs voted against the motion, which read:^[1]

• This House
• notes with concern the successive criticisms by the IMF, the EU and the OECD of the state of the UK's public finances;
• further notes that the Government are reviewing the fiscal rules and calls on the Government to announce the outcome of that review first to this House;
• further calls on the Government to clarify whether or not the Sustainable Investment rule will be met and to implement a full and independent review of the public finances, including off-balance sheet liabilities under the private finance initiative and public sector pension schemes; and
• further calls for the fiscal rules to be scrapped and replaced with a forward-looking fiscal framework with an independent mechanism for monitoring and assessing the sustainability of the Government's fiscal position.

In its place an alternative motion was proposed:

• This House
• notes that the purpose of the fiscal framework is to smooth the path of the economy in the short term, to secure sustainable public finances in the medium term and to ensure that spending and taxation impact fairly between generations;
• recognises the success of the framework over the past decade, reversing historical under-investment in the infrastructure of public services, reducing debt from 43 per cent. of GDP in 1997 to below 37 per cent. last year and allowing borrowing to increase this year in order to support the economy;
• welcomes the £4 billion of tax cuts helping families and businesses this year;
• further notes the turmoil in the world economy and financial markets;
• recognises that Government is rightly focused on the turbulence in the financial markets and helping families and businesses with the twin shocks of the credit crunch and high commodity prices; and
• welcomes the Government's commitment to take whatever steps are necessary to protect the stability of the financial system.

which passed without a further vote.

• [1] Phil Hammond MP, House of Commons, 7 October 2008
• [2] Yvette Cooper MP, House of Commons, 7 October 2008

Debate in Parliament | Source |