Blair – ‘Golden rule will be met’
Prime Minister Tony Blair yesterday stood shoulder-to-shoulder with his chancellor over the Government’s public spending plans.
Mr Blair told the Commons liaison committee – made up of all the chairmen of other committees – the Treasury would not be forced to cut spending or raise taxes.
Mr Blair said his administration would abide with Gordon Brown’s “golden rule” – namely that it should only borrow to invest in the course of an economic cycle.
A growing body of doubters, including the OECD and the Institute for Fiscal Studies, have questioned whether the rule could be maintained without cutting public spending.
The National Institute of Economic and Social Research has warned of a “black hole” of £10 billion or more in Mr Brown’s calculations.
Mr Blair said: “It is true that the borrowing figures have been adjusted because of the downturn, but actually I think the golden rule will be met. That is the prediction the Treasury are making and I think it is shared by a significant number at least of the commentators.
“If we look at it in real terms, our deficit is easily manageable, and is actually better than at most other points in downturns of the past.”
Mr Blair was asked by John McFall whether the government considered charging users directly for public services. The premier replied that users of schools and the health sector would not affected but “user charging” had proven successful in areas such as congestion charging and tuition fees.
“Co-payment” would be ruminated upon in the longer term, possibly in relation to skills, he said.
With an eye on Gordon Brown’s Comprehensive Spending Review, Mr Blair said he would be looking at how monies invested in the health service and schools could produce greater “consumer power” and choice.
Mr Blair’s biannual grilling before the committee came ahead of Bank of England’s Monetary Policy Committee’s decision on interest rates on Thursday.
The MPC is expected to raise interest rates to four per cent.
The Chancellor of the Exchequer will present his annual budget in March.
