Havant MP Alan Mak has voted to approve a new law to ensure the government always balances the national budget and to be in surplus by 2019/20. The House of Commons last night (14th October 2015) voted to back the Chancellor's proposal by 320 to 258, a majority of 62. 21 Labour MPS defied their whip and failed to support Jeremy Corbyn and new Shadow Chancellor John McDonnell.
The new law updates the governing Charter of the Office. Of Budget Responsibility. The OBR’s responsibilities will now include the requirement to produce a fiscal risks statement once every two years. It will also make some changes to how the OBR assesses the long term sustainability of the public finances.
Revisions to the fiscal targets were announced by the Chancellor, George Osborne, at the Summer Budget 2015. The new fiscal target will require the public sector budget to be in surplus in 2019/20 and in subsequent years when the economy is in ‘normal times’. A surplus is achieved when the public sector spends less than it receives in taxes and other receipts.
Alan Mak, MP for Havant, said:
“We need to clear the deficit so we can keep our economy growing in Havant and across Britain. It is not progressive to burden future generations with increased debt and debt interest. That's why I backed a new law to balance the country's books and build a surplus to prepare for rainy days too.”