The government has published its Charter on Budget Responsibility, which at one stage was supposed to be a Labour trap but which now appears to be something that Labour can have a bit of fun with. In his ‘black cloud’ economy speech this afternoon, David Cameron announced that the Charter ‘would have the structural current budget into balance’ in 2017/18, which appears to enshrine into law the Labour plan that he is attacking in the same speech.
The Prime Minister said:
‘We must finish the job we have started. That is why today, the Government is publishing a new Charter for Budget Responsibility.
‘This will enshrine our commitment to get debt falling as a share of our national output by 2016-17 and to get the structural current budget into balance the following year.
‘And as Conservatives we will achieve an overall budget surplus by 2018-19. This is our plan on the deficit.’
Labour says this is a U-turn from the Charter vote being about the overall deficit to being about the structural current deficit. But a Downing Street source says ‘The Charter has always talked about the cyclically-adjusted deficit but as Conservatives we want to go further on that and get the overall budget into balance by 2018’. Labour, by the way, hasn’t set a date for eliminating the deficit, preferring to say it will do so as soon as possible – so signing up to this Charter would still commit it to setting a date, and to £30bn of cuts as set out in the Written Ministerial Statement.
Labour sources are already saying that this new Charter is not inconsistent with their position, which means that they may quite happily enter the elephant trap Osborne originally claimed he was setting for the Opposition – and find the Tories sitting in the trap already, having accepted that it’s actually a rather nice place to hang out.
But will it work out as a good story for Labour? It’s always handy when a government appears to U-turn, and the Tories are making life more difficult for themselves on their strongest issue, but if Labour ends up voting on the Charter while also saying George Osborne’s plans for spending cuts are ‘extreme’, the party may have to work pretty hard at explaining its position to voters.
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