The concept of “fiscal rules” rarely sets the heart racing. Indeed, voters and far too many politicians are keener on indulging culture war issues. Yet few things could be more fundamental than the framework by which governments tax, spend and, critically, borrow.
Labour’s fiscal rules, as set out in its 2024 election manifesto, commits the party to balancing the current budget (that is, day-to-day spending) while allowing for borrowing to invest) and ensuring debt is falling as a share of the economy by the fifth year of the forecast. But it has now been widely reported that the Chancellor is set to relax those rules, in a way that may free up tens of billions of pounds for capital projects.
