We learnt this week that George Osborne is seeking to implement a "new fiscal framework," which will ensure that all future governments have a "permanent commitment to [government budget] surplus." I shall make some points about this framework here.
Firstly, this clearly represents an attack on British democracy and the will of parliament. Properly considered, the Treasury is a branch of government, which is ultimately answerable to the public who elected it and parliament. As a branch of government, the role of the Treasury is to use its fiscal power to assist government policy. If parliament decides to approve the construction of, for example, a high-speed train from Dover to Aberdeen, then the Treasury is obliged to spend whatever necessary to achieve that aim - thus making the Treasury subordinate to the will of parliament, and, by extension, the population, as it should be.
However, under the Conservatives and under this new framework, the Treasury has been and will be independent from the will of parliament. Parliament, or the population, may want a fully funded NHS, or whatever it may be, but the Treasury can simply deny the funding request, taking the nonsensical position that there is no money left. In this way, Osborne will have successfully rendered the democratic nature of parliament barren.
On the other hand, secondly, this framework does not and will not change anything. Money will still be a form of credit, and government money will still be issued by - can we guess? - the government. Stipulating that a country run a surplus does not change the fundamental nature of money. At any point, a future parliament could revoke the framework, insisting on a Treasury that serves the needs of the public. The real issue comes from, as seen in the previous paragraph, the explicit challenge to parliament's and the government's mandates.
Further, the financial secretary to the Treasury, David Gauke, made some interesting remarks about this new framework. He argued that since "in 2014 we were the fastest growing major economy in the western world, while pursuing measures to reduce our deficit," it follows that "the two [deficit reduction and economic growth] can run together."
This is true, but mostly irrelevant. Compared to the eurozone, British growth has been "high." But this is the eurozone that insists that having the majority of its youth (in some areas) unemployed is somehow desirable - in other words, not a standard we want to compare ourselves to. So compared to a car crash, we are doing fine, nothing to be proud about. This is really nothing other than a strawman fallacy, however.
Gauke also compared the UK with Sweden and Canada, essentially noting that if they can do it, why can't we? Well, the UK economy is balanced entirely differently than the Swedish and Canadian ones. Sweden and (until recently) Canada have been running current account surpluses - they have been net exporting goods, net importing money, that is. Contrary to this, the UK runs a current account deficit - money is leaving the country, whilst goods are pouring in. These are completely different situations. The UK private sector, for as long as it desires to net save and net import goods, needs the government to inject money into the economy. This requirement is not so strong in Sweden or Canada, due to the trade differences. Therefore, Gauke's comparison is not valid.
To conclude: Osborne's new framework is a joke, but reveals the contempt the Conservatives have for the democratic will of parliament. Any future (chartalist) government will be able to revoke the framework, returning the Treasury to a subordinate position. Until then, British democracy will have been weakened by the arbitrary, self-imposed "rules" that serve only a few and narrow interests.