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Section 8.9. The Government will adopt a budget, limited to a maximum deficit of three per cent of the gross domestic product, for the full term of its administration.

Proposed Amendments to Section

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Original Version

  • Avatar admin
    Administrator #1  •  2020-08-20 17:49:37

    Section 8.9. Section 8.9. The Government will adopt a budget, limited to a maximum deficit of three per cent of the gross domestic product, for the full term of its administration.

      • worstludditeever

        Section 8.9. With this clause in place, I would have specific concerns about response to a National/Global crisis such as Covid-19.

        No responses
      • Jim Osborne

        Section 8.9. Again it is not appropriate to prescribe in a Constitution what level of budget deficit must be adopted by an elected government. It is a recipe for permanent austerity.
        You have to understand "sectoral balances" in the context of macro-economics. If the government can only run a 3% deficit and there is an overseas sector surplus of 5% (i.e. a 5% trade deficit) there must be a 2% private sector deficit as the three sector deficits/surpluses always add to zero. To get the private sector out of debt the government must run a deficit in excess of 5%. You just can't tie the hands of an elected government like this.

        No responses

Proposed Amendment to Section 8.9.

  • worstludditeever

    Section 8.9. Section 8.9. The Government will adopt a budget, limited to a maximum deficit of three per cent of the gross domestic product, for the full term of its administration.If Parliament, by a two-thirds majority vote of its members, passes a resolution, this deficit threshold can be exceeded for a single year in response to immediate needs of the people of Scotland.

      • Arfem

        Section 8.9. The “Budget” is the forecast estimate of tax revenues against day to day running costs of the country – the ‘overheads’. Exceptional demands like wars, Quantitative Easing, Pandemic subsidies and the like come from the Central Banks i.e. the Bank of England, Federal Reserve etc. The Budget makes politicians accountable to the taxpayers. That said a 2/3 majority would be tough and do no harm

        No responses
      • andrew fraser

        Section 8.9. Still too prescriptive. This should be a recommendation rather than a constitutional obligation. Countries which issue their currency need not fear slightly higher deficits.

          • Arfem

            Section 8.9. Why run up a deficit which accumulates to National Debt which no government ever repays? The only beneficiaries are the banks who indirectly collect interest on it. and it does nothing to keep government accountable to the people.

              • Tim Rideout

                Section 8.9. The National Debt is on the other side of the accounting ledger simply the National Savings, and the beneficiaries are mostly pension funds, private investors, trusts, etc. Some is held by banks as part of their capital reserves. This clause should be removed entirely as it is not appropriate to have in a constitution. The EU 3% rule was literally a back of the fag packet agreement between Helmut Kohl and Francois Mitterrand in the negotiations about establishing the Euro. It was chosen because at the time it would have no effect on France but sounded 'tough' to the Germans. It has no basis in economics and neither do any other fiscal rules.

                No responses

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