This is from Ed Conway of Sky concerning the ‘Times’ extract that follows:
The Treasury is debating a radical change in its accounting rules, reclassifying billions spent on education and health as “investment”. One upshot: Rishi Sunak could meet his fiscal rules without any tax rises or spending cuts..
So this suggests that Labour’s paroxysms as to what investment was or was not have turned out to be, even in Conservative terms, unimportant. We are perhaps beginning to find out that fiscal rules are subject to democratic control.
All these dubious financial rules are just that – they have no obvious logic except for restraining democracy (even though I’m unsure whether I should include the UK government as properly democratic because of our antedeluvian FPTP system, where a majority of votes cast in favour of one party with a much greater majority of votes against, have led to an overwhelming majority Conservative government…)
Cummings scheme to expel Sajid Javid’s advisors and without that to expel the man himself instead seems to suggest that Cummings and the Treasury are now operating as one. ‘Money shortage’ and inconvenient Treasury ‘fiscal rules’ are unlikely to be available to curb governmental actions.
This looks as though we could actually end up with a rather more honest ‘Modern Monetary Theory’ approach to government – with the government creating policies and the money with it.
Normally the Bank of England is tasked with keeping inflation within their target – perhaps this might become the Treasury’s job instead – not able any longer to say there is no money to spend but pointing out that if you are going to spend then certain taxes will need to be raised to ensure inflation is under control.
If we can keep fascism at bay then having a properly spending government who are actually in the Osborne jargon, ‘deficit deniers’, will be some small encouragement. And if Coronavirus doesn’t overturn everything then the upcoming budget will make for interesting reading.