The curious case of the Chancellor, the 4G sale and government borrowing

5th December, 2012 2:10 pm

George Osborne seemed very pleased with himself today, as he suggested that borrowing is forecast to fall.

And yet that’s not the full picture.

The only reason borrowing is forecast to fall this year is because the government has added the 4G mobile spectrum auction to this year’s figures – even though government delays mean the auction hasn’t happened yet. Without the £3.5bn receipts penciled in from the 4G sale, borrowing would be £2bn higher this year than last year.

Previous OBR estimates had suggested that the 4G spectrum could be worth between £1.5 billion and £6.7 billion. It’s unclear at this stage where the £3.5 billion figure came from, as the spectrum hasn’t been sold yet… George Eaton calls it “an accounting trick worthy of Enron” – and he’s right.

Has Osborne factored in money not yet received from a 4G spectrum auction which hasn’t taken place yet, in an attempt to cover the fact that he was set to borrow more this year than last year? It certainly looks like it…

To report anything from the comment section, please e-mail [email protected]
  • rekrab

    A shocking lack of detail from Osborne as he piles more pressure and austerity on those who have the least.

    In June 2010 Cameron and Osborne both said they had saved Britain from a fate worse than Greece? while 18 months on we have the longest ever double dip recession and we’re spending more than ever before propping up more austerity.If you were a betting person, you wouldn’t trust Osborne with a penny

  • Serbitar

    I think Mystic Meg would probably make more accurate economic forecasts via her crystal ball than the OBR’s statisticians. It is difficult to identify an organisation or institution that has been so wrong, about so much, for such a long time… other than the government itself of course… which goes without saying.

    • Quiet_Sceptic

      ‘the government’ or do you mean simply ‘government’.

      I don’t think any of the UK political parties have shown any competence in economic prediction.

    • Quiet_Sceptic

      ‘the government’ or do you mean simply ‘government’.

      I don’t think any of the UK political parties have shown any competence in economic prediction.

      • Serbitar

        True that.

      • Serbitar

        True that.

      • Serbitar

        True that.

    • JoeDM

      No economic forcast is worth the paper it is printed on.

      Trying to manage an economy through Keynesian-style demand management is like trying to drive a car when you can only see your rear view mirror.

      • TomFairfax

        Strangely enough something similar was said about Geofrey Howe’s monetarist stint as Chancellor in the first Thatcher government at the time. Something about driving a car by just looking at the instruments and not out of the window.

  • JoeDM

    I was very surprised by the dreadful performance by Ed Balls. He seemed to totally out of his depth and unprepared.

    • aracataca

      Oh what and Osborne was good?

    • aracataca

      Oh what and Osborne was good?

    • aracataca

      Oh what and Osborne was good?

  • Quiet_Sceptic

    It’s hard to get excited about.

    Compared to things like PFI and pension liabilities which are off-balance sheet it’s a drop in the ocean.

Latest

  • Comment Featured Steel crisis and Chinese dumping shows why we need a truly ethical foreign policy

    Steel crisis and Chinese dumping shows why we need a truly ethical foreign policy

      While Carwyn Jones, Welsh First Minister, has travelled to India to ensure the board of Tata consider the implications of the sale of Port Talbot steelworks, Angela Eagle has called for China to be refused “market economy status”. This is an important statement. It indicates the party is changing policy. We need a new consensus on international trade.   In 1930, President Herbert Hoover signed into law the Smoot–Hawley Tariff Act which imposed a 50 per cent tax on […]

    Read more →
  • Featured News Corbyn and Kinnock demand more help for “traumatised” steel industry after Tata board reaches impasse

    Corbyn and Kinnock demand more help for “traumatised” steel industry after Tata board reaches impasse

    Labour MPs including Jeremy Corbyn are piling pressure on the Tories to do more to help the struggling steel industry after a crunch meeting of the Tata board broke up without a shortlist of bidders for its UK operations being agreed. Tata Steel had been expected to publish the shortlist after its meeting in Mumbai today but the firm said only that several bids were under “active consideration”. The uncertainty continues as hundreds of British steelworkers represented by Community, Unite […]

    Read more →
  • Comment Featured PMQs Verdict: Osborne falters, Eagle soars and Trident lurks in the background

    PMQs Verdict: Osborne falters, Eagle soars and Trident lurks in the background

    Those in the Commons chamber today were slightly taken aback by the wall of noise that greeted Angela Eagle as she stood up to the despatch box this afternoon. It is unusual these days to see Labour MPs in such vocal spirit, and they seemed to be making up for lost time with extra volume. As much as the absence of Corbyn could account for this (the Labour leader does not encourage noise from his backbenchers, and it is not […]

    Read more →
  • Comment Featured Dan Jarvis: As a former soldier I back the EU as a project for peace

    Dan Jarvis: As a former soldier I back the EU as a project for peace

    This is a speech entitled The patriotic choice for a more secure Britain delivered by Dan Jarvis at the Royal British Legion in Mitcham, south London, today. I want to begin by thanking Siobhain [McDonagh] for her welcome. Since 1997 she has served as MP for Mitcham and Morden, working tirelessly for her constituents and it’s a great pleasure to be in her constituency today. I would also like to thank Ross Kemp for his kind introduction. We are particularly grateful that today […]

    Read more →
  • Europe Featured News McDonnell seizes on IFS report to warn Brexit would spell “disaster” of more austerity

    McDonnell seizes on IFS report to warn Brexit would spell “disaster” of more austerity

    A vote to leave the EU would be a “disaster”, John McDonnell has said today as the independent Institute for Fiscal Studies (IFS) warns that Brexit would lead to two more years of austerity. A report published today by Britain’s leading tax and spending think tank says that leaving the EU would cost the country between £20 billion and £40 billion in 2019/20, as the UK’s economic growth falls. McDonnell, the shadow Chancellor, said such losses would be the inevitable […]

    Read more →
x

LabourList Daily Email

Everything Labour. Every weekday morning

Share with your friends










Submit