Alex Hern questions why the Treasury secretaries are denying claims on borrowing that their own department put out.
Following on from our report yesterday on the fact that the Treasury’s figures showing that they would borrow more than Alasdair Darling’s plan called for, Labour has come out fighting, while the Treasury is seeking to downplay their own statistics.
Yesterday, we reported:
The Treasury has collated 14 independent forecasters’ predictions (pdf, p.18) for net government borrowing over the next four years.
Their collected view is that chancellor George Osborne will borrow billions more than the Office of Budget Responsibility predicted he would in June 2010 (pdf, Table C7, p.90) – or that the OBR said Alistair Darling (pdf, Table 4.5, p.38) would have if Labour had been re-elected.
Commenting on the figures, shadow chief secretary to the Treasury Rachel Reeves said:
“These very concerning forecasts expose how this government’s reckless plan to try and cut spending and raise taxes too far and too fast is backfiring badly, as we and the International Monetary Fund warned it would.”
Last night, Chuka Umunna, the shadow business secretary, appeared on Newsnight opposing the economic secretary to the Treasury David Gauke.
Responding to Gauke’s claims the deficit would be ended by 2014, Umunna said:
“The consensus forecasts, all of these people, are saying that they’re going to be borrowing possibly up to £100bn more than was planned.
“But the thing is, Jeremy, the best way that you can actually reduce your borrowing is by getting growth back and getting people in to work. I mean, we have seen some incredibly tragic figures today, over a million young people unemployed…
“The reason we’re in that position is because, frankly, the economy hasn’t grown since this time last year, but what has happened since this time last year is that confidence nosedived, and when confidence nosedives, demand falls. That’s why we’re in the position we’re in, and the question is, how bad does it have to get before David and his colleagues decide to change course?”
With the economy in intensive care, the government seem to be stuck on the first stage of grief: Denial. When it comes to yesterday’s terrible employment news, Cameron, Osborne and IDS are now entering their 27th straight hour of silence – and Labour List has a timer counting that down to the millisecond – and their response to these figures is simply to deny there is a problem.
On Newsnight, Gauke was confronted by Jeremy Paxman about the £100 billion difference between the Darling plan and the current independent projections.
Paxman said:
“You do accept that you’re borrowing more than Alasdair Darling would have been borrowing if he’d stuck to his plan. Those are your own figures!”
Gauke’s response:
“No, I don’t accept that.”
A similar scenario played out on BBC News 24 this morning, as the financial secretary to the Treasury, Mark Hoban, refused to comment on the figures, saying only that the Office of Budget Responsibility had not yet released their latest projections. Given downgrading growth forecasts and upgrading projections is form for the OBR, we would caution against Mr Hoban putting too much faith in them.
Finally on Newsnight, David Gauke repeated that old chestnut of the coalition:
“We don’t get borrowing down by borrowing more.”
Watch the exchange in full:
Given Osborne’s own plan led to borrowing £149 billion in 2010/2011 – and even in the best case scenarios, now far gone, would still have had a £37 billion deficit in 2014/15 – a more accurate mantra would be, “we are trying to get borrowing down by borrowing more”. Nothing wrong with that – ending the deficit this year would be foolhardy, to say the least – but a little honesty would be nice.
See also:
• Osborne set to borrow billions more than Darling was projected to – Daniel Elton, November 16th 2011
• Fast spending cuts push economy from fastest quarterly growth for a decade towards zero – Cormac Hollingsworth, November 1st 2011
• Unprecedented growth of 1.3 per cent needed for OBR to meet its projection – Will Straw, October 31st 2011
• Commons to vote today on Labour’s five-point plan for jobs – Shamik Das, October 12th 2011
• Without growth will we even halve the deficit? – Cormac Hollingsworth, September 20th 2011
To reach hundreds of thousands of new readers and to make the biggest impact we can in the next general election, we need to grow our donor base substantially.
That's why in 2024, we are seeking to generate 150 additional regular donors to support Left Foot Forward's work.
We still need another 124 people to donate to hit the target. You can help. Donate today.
8 Responses to “Treasury vs Treasury on the borrowing gap: One of them’s wrong”
James Mills
Treasury vs Treasury on the borrowing gap: One of them’s wrong, writes @AlexHern: http://t.co/Ao0bySiG ft. @ChukaUmunna #Newsnight
Keith Hudson
Treasury vs Treasury on the borrowing gap: One of them’s wrong, writes @AlexHern: http://t.co/Ao0bySiG ft. @ChukaUmunna #Newsnight
Andrew D Burns
RT @leftfootfwd: Treasury vs Treasury on the borrowing gap: One of them’s wrong http://t.co/hWzabPfT
Political Planet
Treasury vs Treasury on the borrowing gap: One of them’s wrong: Alex Hern questions why the Treasury secretaries… http://t.co/Uv6We8nO
Alex Braithwaite
RT @leftfootfwd: Treasury vs Treasury on the borrowing gap: One of them’s wrong http://t.co/EtSOgSJo