John
McDonnell MP, Labour’s Shadow Chancellor, speaking after the vote tonight on
the revised Charter for Budget Responsibility, said:
“This
is not a Charter for Budget Responsibility, it’s a ‘Charter for Alternative
Facts’, as the Chancellor has tonight abolished the OBR’s ability to determine
when a negative shock occurs. This represents a lack of confidence by the
Chancellor in his ability to reach his own targets, as well as a rowing back of
the welcome principles the OBR was created for – impartiality and credibility
of fiscal policy.
“Instead
of less scrutiny by the OBR, Labour would like to see more, such as our call
for the Chancellor to give power to the OBR to assess short-medium term policy
decisions on health spending. Given the last six years of Tory underfunding in
our NHS alongside the Government’s denials of the resulting crisis, we need to
restore not diminish the public’s faith in the Government’s spending plans.
“Under
this new charter the OBR will assume the role of bystander rather than arbiter
of whether or not the economy is facing a negative shock. This is a huge power
grab by the Chancellor, as it means he can decide when and what such a “shock”
will be, and therefore he can suspend his rules when he likes, and make up his
targets as he goes along.
“This
Charter also continues with the practice of lumping infrastructure spending in
with day-to-day spending, meaning that there
will be insufficient scope for investment in our economy, which could hinder
growth and therefore our ability to reduce the national debt.
“Despite all the rhetoric of “pressing the reset button”, the
Autumn Statement has shown that there would be a continuation of austerity cuts
to public services. There is still no more money for the NHS and social care
crisis, or for ESA and Universal Credit recipients facing cuts.
“Labour’s
Fiscal Credibility Rule would provide the adequate level of investment our
economy needs, underpinned by independent oversight coming from both the MPC
and a beefed up OBR, which would report to parliament and not the Treasury.”
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