Jan 06 - GSD Says Government “Seeks To Weaken Public Debt Limit Control”
The GSD Opposition says it has “noted the flurry” of draft legislation that has been issued by the Government over the last few weeks. However, the party notes that a proposal to amend the Public Finance (Borrowing Powers) Act 2008 was gazetted on 24 December and “has not as yet been given any prominence.”
GSD Opposition MP with shadow responsibility for public finance Roy Clinton said:
“The proposed amendment is surprising not in that it seeks to increase the net public debt limit from £200 million to £300 million, but that it would remove the limit set at 80% of recurrent revenue. This would mean that the legal net debt limit would become the higher of £300 million or 40% of GDP alone. Given 40% of GDP has always been higher than 80% of recurrent revenue the Government would be allowed an extra £200 million of net debt assuming GDP of £1.6 billion. This reliance on GDP alone and not recurrent revenue as a “warning light” cannot be considered a prudent step to take in the management of our public finances. We intend to question the Government as to the need for this amendment to the Act, it would appear to be designed to avoid the requirement to seek Parliamentary approval for an increase in borrowing limits which in itself is deeply concerning coming so soon after the General Election.”
Below: Screen shot of the proposed amendment:
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