Thu 17 July 2008, The Daily Telegraph

Fiscal checks on government could be a vote winner

By Gordon Brown
Setting interest rates was once a political game, but the Monetary Policy Committee (MPC) put paid to that, on the whole. The raising and spending of taxes, however, has always been political. And very dangerously so as Gordon Brown brilliantly leads us towards recession with the public finances in deficit despite a prolonged period of low inflationary growth. So why not learn from the MPC and create a Fiscal Policy Committee (FPC) to curb the natural profligacy of vote hungry politicians? The Tories seem to be airing these ideas in the same way Gordon Brown and Tony Blair dusted off ideas for an independent MPC and presented them as a radical way of stabilising prices. Fiscal policy could certainly do with some kind of external influence to calm, if not control it. The MPC has an inflation goal and tools to achieve it. Could an FPC be given similar powers? Presumably Parliament would kick up a stink about loss of sovereignty if an FPC was given the Government's targets (agreed by voters at an election) and the power to regulate spending (or tax cuts) to meet them.
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