No Decision Yet On Borrowing Rules - Alistair Darling
In line with the government's recent strategy of late, the newspapers have been full of stories about an impending change in the fiscal rules which were core to Gordon Brown's time at the Treasury. The rules were introduced for future Labour government's as Mr Brown boasted that he had cracked the traditional boom and bust economic cycle and was in better control of the economy than anyone from the recent past. But is Labour priming the economic experts for a change in policy? A change in the fundamental rules which rule the Treasury?
While Mr Darling has refuted suggestions that a decision has been made about changing the golden rules, he has not ruled out the possibility. In affect he has primed experts for a change in the criteria so that when it does happen he can argue 'I told you so months ago'. This is classic spin and will take some of the pressure off the almost inevitable change later this year.
However, if the authorities think they can change these rules and carry on with business as normal they may be sadly mistaken. Many business leaders have suggested that the creditability of the government is at stake and if the rules are changed the City will be more cautious than ever.
This is the equivalent of moving the goalposts just as you are about to score an own goal - but in the end you only cheat yourself!
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