Channel 4 highlights Osborne’s ‘grossly misleading claims on investment’

Faisal Islam at Channel 4 Factcheck claims to have witnessed "the most egregious statistical chicanery...in a Treasury fiscal event in 13 years of covering economics for newspapers and TV".

Faisal Islam at Channel 4 Factcheck claims to have witnessed “the most egregious statistical chicanery…in a Treasury fiscal event in 13 years of covering economics for newspapers and TV”.

What is he so excised about? Have a look at this:

‘I was quite shocked to hear the chancellor claim that investment spending would be £50bn. This would be fiscal stimulus territory. I got some return tweets about PSGI: “Public Sector Gross Investment”. Then the chancellor talked of £300bn of investment. That too sounded quite high. Again it was gross investment.

‘The traditional standard measure of government investment spending is “net investment” which accounts for depreciation on the government’s giant stock of capital. It is the way government investment has been measured for decades.

‘So it was a bit cheeky, a little cute, for the chancellor to switch measures for his speech. This is clearly part of an effort to communicate a narrative of “investing in growth” as we go “from rescue to recovery”. The real numbers would have to wait until the fiscal documentation was published.

‘Alas it was nowhere to be seen. The only reference to net investment was as a footnote to a table about the impact of the Royal Mail pension. Nothing. Nada. Gone. Erased. PSGI is now the only measure, and it has the happy side effect of sounding bigger.

‘However you can compare PSGI announced today to PSGI in March in the OBR’s table. Miraculously those numbers are idenitical to the number’s published today. Actually that’s not quite right: this year PSGI is £100m less than forecast by OBR in March. So, officially, capital investment by government has been CUT. That’s not the impression you would get from the chancellor’s speech.’

16 Responses to “Channel 4 highlights Osborne’s ‘grossly misleading claims on investment’”

  1. LB

    So how are all those investments Labour made doing?

    Must be raking in the profits – er no

    Must be saving loads of cash because of efficiencies (cuts) – er no

  2. DJT1million

    Irrelevant nonsense.

    The chancellors mistakes and lies are all his own as is his colossal failure to do anything positive for the majority of British people and our economy.

    To repeat, austerity is a busted flush, a failure, it hasn’t worked in the past, it won’t work now and making us go through even more of such a failed policy is compounding the problems we face, not solving them.

  3. LB

    Spending is up. Notice the figures.

    Has it worked? Nope.

    The state is sucking resources away from the productive to feed its need to spend on the unproductive.

    End result, its busted.

    There has been no austerity. There’s just been more and more spending.

  4. DJT1million

    Nonsense, sick of hearing this rubbish.

    Spending is up certainly, but it’s going up because the austerity policies are failing us. Put simply, the government is wasting money on failure and on putting an ever larger sticking plaster over the consequences of their policies, making the lives of millions a misery in the process and it is still costing more than if they changed their stupid policy. We are getting further into debt as a nation yet receiving fewer services and more poverty even as spending goes through the roof, it’s stupid, it’s not working and I do wish people like your good self would stop trying to convince us that even more austerity would be the way to go.

    How many times……austerity has never worked in the past and isn’t working now, we didn’t have to go through all this pain to re-learn that lesson.

  5. LB

    It’s not.

    However, you are right on some of the causes.

    Lets look at welfare. 60 quid a week isn’t much to live off, and yet you’re asking me to believe that has driving up government spending?

    No the core reasons are low skilled migration. You have the debt costs. On top there is the hidden debt, the pensions that are hidden off the books. Wage costs in the PS are going up, but stuck in the private sector. Its the private sector that pays all tax. The tax that PS workers pays, comes from the tax the PS pays.

    What’s happened is that the debts are rising faster than the ability of the productive to pay, and the taxes imposed make things more unproductive. Hence companies move overseas, and work gets offshorred.

    We need low taxes, particularly low employment taxes. Hence I would suggest abolishing Vince Cables department that doesn’t even know how many jobs it creates. We use that cash to cut low paid employer’s NI. At the same time, we curtail low skilled migrants.

    The migrant issue has several major effects. Government spending is about to hit the 12K per person per year. Low skilled migrants aren’t paying that amount of tax, plus they drive down wages for low skilled Brits. Lets stop that. It’s legal, after all Cyprus broke EU law on movement of capital. We can do the same for freedom of movement of people.

    That cuts costs, by 48 billion a year. We keep the productive 1 million migrants, and remove the rest. That’s half way to getting towards a bit of balance on the borrowing.

    The NI cut makes a major difference too.

    We also need cuts in corporation tax. If you have a high rate of tax you get a high rate of nothing If you have a low rate, you get a low rate of lots.

    You also need capital allowances for machinery and R&D to be zero.

    Next, we need a free trade area with the USA and Canada.

    Lastly, and this is disasterous, the pensions debt has to be addressed. It’s well over 5,000 billion, and rising at 734 bn a year. That’s your debt increase and its unstainable.

    I would say no more state pension, civil service pension. You get what you have already accrued and no more. Then you have to save your NI. That creates a lot of money for investment. Then if and only if that fund plus the accrued pension runs out, do you get help. The remainder of your fund goes to your heirs. A median wage earner would have had 627K if they had done this, rather than a promise of state pension costing 152K, that will be defaulted on

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