Should Reeves's fiscal rules stay golden, or are they meant to be broken?

Phillip Inman on the economic constraints underpinning the chancellor's spring statement - and why she sees them as vital

- Phillip Inman

As Rachel Reeves faced a backlash over government plans unveiled last week to slash spending to balance the books, the chancellor and Treasury repeatedly argued that difficult decisions were necessary to avoid breaking the fiscal rules she adopted last October.

But what exactly are these constraints, and why does Reeves believe them to be so important? In the build-up to Wednesday's spring statement, why are many economists urging her to flex or even rewrite them, as chancellors have on several occasions since they were first drafted by Labour nearly three decades ago?

Why does the Treasury have budget rules?

Responsible governments should match day-to-day spending with their income and only borrow to invest. This is the "golden rule" adopted by Gordon Brown in 1997 and contained in the charter and fiscal framework George Osborne adopted when he became chancellor in 2010 in the wake of the 2008 financial crisis.

Osborne provided an extra layer of oversight, telling the Treasury it could no longer mark its own homework. To this end, he created an independent forecaster and auditor - the Office for Budget Responsibility (OBR).

Keir Starmer's government is following the Brown playbook with a view to telling financial markets and voters the public finances are safe in Labour's hands, and to avoid a jump in the cost of servicing government debt such as the one that followed Liz Truss's disastrous mini-budget, which avoided OBR oversight.

What is the mandate?

The charter for budget responsibility "presents the government's approach to operating fiscal policy and managing sustainable public finances in the long-term interests of the UK".