On Monday, MPs debated the “Charter for Budget Responsibility”. In the Charter, the Government sets out how its management of the public finances operates. The current Charter was approved by the House of Commons in January 2017. and this week, the House of Commons voted on whether to approve a revised Charter, which was published alongside the Autumn Budget 2021.
Richard Fuller, MP for North East Bedfordshire, contributed to the debate, which can be watched here.
Speaking afterwards, Richard said:
The debate on the Charter for Budget Responsibility was timely. The government has borrowed £400bn to tackle Covid and now faces calls to intervene once again on energy bills. The Charter seeks to put boundaries on the burdens placed on taxpayers, current and future. My view is that for the last quarter of a century, politicians in the U.K. and most other democracies, have failed to get this right, have racked up debts and tax rates too high and now face “an uncomfortable truth” about how to meet these obligations.
More worryingly I fear that the Bank of England is too enamoured with a view that future interest rates are on a consistent trajectory lower and lower. Indeed a working paper last year analysed 800 years of financial history to make this point. The Bank of England may be right; it may be wrong. But it is this question that is the real question about living standards today and, more importantly, for our children and grandchildren who will be called upon to service the debts we have built up.