Brown gets fiscal boost
Gordon Brown’s sums have received a multi-billion boost after the Office of National Statistics revised road expenditure figures.
Yesterday, the ONS said since 1998/1999 there has been an element of “double counting” in recording road maintenance expenditure.
This means that current expenditure will be reduced and net investment increased – giving a boost to the Chancellor’s changes of meeting his golden rule of only borrowing to invest.
But, the ONS insisted that it was not a “conceptual reclassification”.
The amount gained in ‘rebate’ will be between two and three billion.
Coming just weeks before Mr Brown’s Budget, the Shadow Chancellor Oliver Letwin was more than a little suspicious.
Mr Letwin said: “This is a very murky area. At best the timing of these changes is very convenient for the Government. There will inevitably be suspicions that the figures are being fiddled.”
He said that the “technical obscurity of these changes, combined with the convenient timing, illustrates very clearly why we need independent national statistics.”
Mr Letwin said that despite the revisions he believed that taxes would still rise. “As it happens, the effect of these changes is marginal in comparison with the size of Mr Blair’s black hole.
“Instead of having to raise taxes by £11 billion a year, as the IFS has forecasted, Labour if re-elected would have a black hole of £10.5 billion a year once these deductions are made.”
The Treasury insists that the Chancellor is on target to meet his golden rule this year, but all eyes will be on the March 16 budget.
