Following last week's episode with Ed Balls, former Treasury boss Nick Macpherson joins Sam and Ayesha to interrogate the economic environment facing the next government. Weâre hearing a lot from Labour about economic security, fighting off the partyâs reputation for âspendonomicsâ, but is the party being too far too cautious and harming its plans for growth?
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Nick Macpherson on this weekâs pod suggests maybe it is. The former Treasury boss says the party shouldnât get âobsessed with fiscal rulesâ
Donât get obsessed with fiscal rules, ex-Treasury boss warns Labour
A future Labour Government should borrow to invest and avoid being âtoo obsessed with fiscal rulesâ, says the former Treasury boss, Sir Nick McPherson, on this weekâs The Power Test podcast with Ayesha Hazarika and Sam Freedman.
In a wide-ranging discussion about a future government transition and Labourâs economic plans, Sir Nick said:
Borrowing:
âMy guess is Labour will, and so they should, borrow a bit more in order to invest. Providing that investment program is focused on what really matters and is then seen through I don't see that as a great problem in terms of the public finances. Indeed, some would argue that that Labour may be being too cautious.â
Labourâs fiscal plans:
âThe case for being tough now is potentially it gives them room for manoeuvre. It gets them credit with the financial markets which, actually, is even more important today than it was in 1997 simply because the national debt is a whole lot higher and the interest rate bill required to service that debt is very high indeed.
