Magazine article Public Finance

Darling Denies That Extra Borrowing Puts Fiscal Rules at Risk

Magazine article Public Finance

Darling Denies That Extra Borrowing Puts Fiscal Rules at Risk

Article excerpt

Chancellor Alistair Darting has dismissed accusations that his decision to borrow ?2.7bn to hind a tax cut has put the fiscal rutas at risk.

Further doubt was cast on the government's ability to moat the self-imposed rulas whan the Organls ation for Economic Economic outlook report said UK growth had slowed to 1.5% in the first quarter of 2008.

The slowing economy is also likely to limit tax revenues, and the government deficit now seems likely to move significantly above 3% of GDP, putting the fiscal rules at risk,' the OEClVs June 4 report states.

But confronted with the OECD's conclusion by the Treasury select committee, Darling said: 'I don't accept that we're putting the rules at risk. They provide a good discipline on us. What I've done [borrowing E2.7bn] we can afford and was consistent with the rules.'

Giving evidence to the committee In the second and final hearing of its inquiry into the effect of the Budget on low-income households, Darling gave no indication of how he planned to compensate individuals who have lost out. …

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