Our manifesto is fully costed, with all current spending paid for out of taxation or redirected revenue streams. Our public services must rest on the foundation of sound finances. Labour will therefore set the target of eliminating the government’s deficit on day-to-day spending within five years.
But government must have a laser- like focus on how we earn, as well as how we spend. At the same time as eliminating the current deficit, Labour will invest in our future, to ensure faster growth and help us to earn our way as a country again.
To maintain good fiscal health, we will have a firm rule in place to guide all our taxation and spending decisions. Our Fiscal Credibility Rule is based on the simple principle that government should not be borrowing for day-to- day spending, but that future growth depends on investment. It was designed in conjunction with world- leading economists. It also means we are committed to ensuring that the national debt is lower at the end of the next Parliament than it is today.
Compliance with the rule will be overseen by a strengthened and truly independent Office for Budget Responsibility, which we will make accountable to Parliament. We will also consult on implementing the recommendations of the Kerslake Review of the Treasury.