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…

  • 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

  • News Labour reveal Tories’ secret plan to cut the number of NHS nurses after the election

    Labour reveal Tories’ secret plan to cut the number of NHS nurses after the election

    The Labour party will tomorrow reveal details of a Tory plan to cut the number of nurses in the NHS immediately after the general election. Andy Burnham, Shadow Health Secretary, will publish the full details of this plan and he will say that it shows the difference between Labour’s fully-funded plan for the NHS and the Tories’ empty policies. The figures show the number of NHS nurses who will lose their jobs if the Tories win in May –  Health Education […]

    Read more →
  • Comment We need to do much more to ensure that being a survivor of domestic abuse doesn’t make it dangerous to vote

    We need to do much more to ensure that being a survivor of domestic abuse doesn’t make it dangerous to vote

    It’s the final countdown – just one day left to register to vote and make sure you will get your say in May’s General Election – and lots of brilliant people are working hard to make sure everyone knows that time is running out. Check out Bite the Ballot, Unite’s #NoVoteNoVoice campaign and the women-focused #RegistHERtoVote for advice, tips and encouragement to get yourself and your friends registered. It’s all the more important this time round – and not just […]

    Read more →
  • Comment Featured 5 things we learned from David Axelrod’s election campaign intervention

    5 things we learned from David Axelrod’s election campaign intervention

    David Axelrod was hired to advise Ed Miliband exactly a year ago, but there has been considerable criticism of the former Obama adviser (from both inside as well as outisde the party) for his apparent lack of time spent in the UK working on the campaign. At a reported cost of £300,000 (for a party that doesn’t have a great deal of money) slightly more was expected. But today there’s an interview with Axelrod in the Guardian – his first appearance […]

    Read more →
  • Comment The latest universal credit figures are an embarrassment for the Tories

    The latest universal credit figures are an embarrassment for the Tories

    Yesterday, the Department of Work and Pensions published their latest figures for the number of people claiming universal credit. The figures showed that after 2 years there are now just 46,920 claiming Universal Credit. That is less than 5% of the total number of claimants that Iain Duncan Smith originally promised by April 2014. Or, put another way, the government’s flagship program that Iain Duncan Smith had repeatedly said was ‘on time and on budget’ has fallen 95% short of its target […]

    Read more →
  • News Labour explore the prospect of a deal with the Lib Dems

    Labour explore the prospect of a deal with the Lib Dems

    With the general election less than three weeks away and polls suggesting that it’s unlikely any party will win an outright majority, it’s rumoured that Labour are taking a good look at the Lib Dems’ manifesto to see where there’s policy overlap. The Financial Times (£) have reported that Labour are making these moves ahead of May to see if the two parties could come to an agreement in the event of a hung parliament. Which is no surprise given the […]

    Read more →
Share with your friends










Submit