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Chancellor George Osborne’s fiscal charter approved after intense Commons debate

The Government’s new spending rules have been backed by MPs, receiving 320 to 258 votes after a heated Commons debate.

The fiscal charter requires public finances to be in overall budget surplus by 2019/20. It would legally force future governments to run an absolute budget surplus when the economy is expanding.

The Labour party voted against the Conservative party’s Charter for Budget Responsibility. However, 21 of their MPs refused to vote against Osborne’s new fiscal rules.

Shadow chancellor John McDonnell labelled his decision to reverse Labour’s stance ‘embarrassing’. He had previously created a plan to tell Labour MPs to vote for Osborne’s charter, but subsequently made the decision to reverse it.

He admitted: ‘I was trying to out-Osborne Osborne.’

The new charter is an amended version of the one previously set out in July’s Budget. Although it was opposed by the SNP, the Liberal Democrats and the majority of Labour MPs, it passed with a majority of 62.

The Chancellor said that the plan represented ‘economic sanity’, requiring governments ‘in normal times’ to spend less than they receive in tax revenue.

Osborne stated that the charter would bear down on the ‘irresolution of politicians who lack the discipline to control public spending and deliver growth.’