There was little love lost between the prime minister and the chancellor on Valentine’s Day this year.
On the morning of the 13th February, Sajid Javid was one of the most senior politicians in the country, but by the 14th February he was on the back benches. The reported clash concerned the hiring and firing of the chancellor’s advisors. But it also hinted at a deeper disagreement over the fundamental rules which should govern government spending.
For the past decade, fiscal rules – frameworks which aim to put numerical controls on how much governments can borrow and spend – were a major battleground between the UK government and its critics. In the coalition government’s first budget in 2010, the then chancellor George Osborne introduced rules that aimed to reduce government debt and eliminate the structural deficit by making deep cuts. Despite inflicting ‘great misery’ and economic damage, austerity remained official government policy for the best part of a decade.
