Brown's 'Billy Bunter' Treasury

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Byline: By Ben Padley and David Hughes

The Government was accused yesterday of having as much credibility as "Billy Bunter's postal order" amid reports the Treasury is rewriting Gordon Brown's fiscal rules.

The Prime Minister was attacked in the Lords over claims officials are drafting a looser framework so the Treasury would not have to break the rule limiting public sector debt to 40 per cent of national income.

Tory former Scottish Secretary Lord Forsyth of Drumlean said the "ridiculous" policy change was "straight out of Animal Farm".

The fiscal rules were laid down by Mr Brown as Chancellor as soon as Labour came to power in 1997 to stress the party's reputation for economic competence.

Lord Forsyth said the response to the economic situation in terms of loosening rules showed the "state of chaos" the Government was in.

During second reading debate on the Finance Bill, he said he was "astonished" Government Treasury spokesman Lord Davies of Oldham had not referred to the claims at all in his opening speech.

He said Mr Brown, as Chancellor, had always talked about not returning to boom and bust: "Well we have had the boom and today we have had confirmation of the bust.

"This is straight out of Animal Farm, that the justification for abandoning the borrowing rule is because 'if we don't abandon the rule people won't have confidence in the rule'.

"This is ridiculous. The rule was meant to be there to be a constraint on Government. If the constraint is reached and the responses will change the rule, the Government has as much credibility as Billy Bunter's postal order."

Lord Forsyth was scathing in his criticism of the Prime Minister's "meddling" in the tax system in the Finance Bill.

"It is a very sad Bill, it is a Bill which the Government is having to pull back on. It is a Government which seems to have lost control of public expenditure, a Government which seems to have run out of ideas and run out of road. This is the price we have paid for having a meddler in Downing Street and the sooner he is out and we have a government genuinely committed to fairer, lower, flatter taxes then the sooner we can see the growth we need in our economy return. …