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

December 5, 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…

  • 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

  • Europe News Video Alan Johnson explains why he supports the EU

    Alan Johnson explains why he supports the EU

    While much of the political narrative around the European Union recently has been about restricting rights on EU migrants, former Home Secretary Alan Johnson has come out to talk about why he is favour of it. In a minute-long video for the pro-EU think tank British Influence, Johnson explains that he is “part romantic, part pragmatist about Europe”. He is attracted to the idea on a romantic level because of its conception as a forum to promote diplomacy rather than […]

    Read more →
  • Comment Time to pay school support staff their due

    Time to pay school support staff their due

    The debate about schools, pupil attainment and changes to our education system rages on. Yet there is one group of workers who are rarely discussed or heard in the debate, despite playing a fundamental role in almost every aspect of school life – school support staff. UNISON has almost been a lone voice in championing this overlooked group. School support staff help children learn, keep them safe and healthy and ensure schools run smoothly. They help provide the holistic attention […]

    Read more →
  • Europe News Cooper says Cameron’s migration target is “in tatters” – and Tory backbenchers agree

    Cooper says Cameron’s migration target is “in tatters” – and Tory backbenchers agree

    Yvette Cooper has slammed David Cameron’s major speech on EU immigration, saying that he has spent weeks of “posturing, pandering and making more promises he can’t keep” in order to placate his backbenchers, rather than coming up with practical solutions. Cameron said that he wanted to extend the period that EU migrants would have to wait before claiming benefits from three months to four years – double the two years Labour announced last week. But Shadow Home Secretary Cooper said […]

    Read more →
  • Featured Scotland Labour will implement Smith Commission proposals in first Queen’s Speech, pledges Miliband

    Labour will implement Smith Commission proposals in first Queen’s Speech, pledges Miliband

    Ed Miliband today said that the vow he made to radically devolve powers to Holyrood during the referendum campaign had been ‘signed, sealed and delivered’ by the publication of the Smith Commission’s report yesterday. He told an audience in Glasgow this morning that Labour would fully implement the proposals set out by the report in the first Queen’s Speech if elected next year. You can read Mark Ferguson’s take on the Smith Commission’s report here. Miliband said: “A vow was […]

    Read more →
  • Featured News Diane Abbott expected to announce she will run to be London Mayor

    Diane Abbott expected to announce she will run to be London Mayor

    It’s rumoured that tomorrow at London Labour party conference Diane Abbott, the MP for Hackney and Stoke Newington, will announce that she will run to be Labour’s candidate for Mayor of London. Abbott  was Shadow Minister for Public Health until last year and has been the Labour MP for the north east London constituency for twenty seven years – where she doubled her majority in 2010. Prior to becoming an MP she was elected to Westminster City Council in 1982. […]

    Read more →