Chancellor's statement shows greater scrutiny of fiscal policy needed - Cable

12.00.00am BST (GMT +0100) Tue 19th Jul 2005

In response to comments made today by the Chancellor of the Exchequer to the Treasury Select Committee, concerning the change to the economic cycle, Liberal Democrat Shadow Chancellor, Vince Cable MP said:

"This statement makes a mockery of the Golden Rule.

"This will dissipate the small amount of credibility that the Chancellor established when the rule was created.

"This move shows again the need for independent scrutiny of fiscal policy. For too long the Chancellor has been setting his own tests and then taking credit for having passed. He should admit he has made a mistake this time.

"Although the NAO will be allowed to audit the Chancellor's decision, it is simply not good enough.

"The NAO or a similar body should be handed the responsibility of deciding the start and end dates of the economic cycle, and should have access to the Treasury's economic data so that it can produce independent and transparent forecasts in the future.

"This is the only way that credibility in fiscal policy and the Golden rule can be re-established."