Watchdog backs FT complaint on debt figures By Chris Giles, Economics Editor George Osborne’s claims on deficit reduction were hit yesterday when the Statistics Authority blocked his ability to say public borrowing was improved by a Treasury raid on the Bank of England. Upholding a complaint from the Financial Times, the authority reprimanded the Office for National Statistics for treating these flows as equivalent to tax revenues in the headline figures for the government’s books. The raid on the BoE flattered public sector net borrowing excluding financial interventions – the headline figure used in the government’s fiscal rules – by £6.4bn in 2012-13 and up to £12.3bn this financial year. As the flows from the BoE to Treasury were expected to continue for the next few years, they made the fiscal mandate easier to hit. In a strongly worded report, an independent review team for the authority found government statisticians had interpreted their own guidance in a “selective” way and had informed their decision with irrelevant European guidance. The review team expressed “strong reservations” about the advisory committee that made the recommendation because it was dominated by officials from government departments. “We see no strong case to support the current composition and voting arrangements,” of the classification advisory committee on the public finances, the review said. The report found the “counter-arguments [made by the Financial Times] to be more persuasive”, and has recommended the ONS look again at its headline measures of government borrowing and debt. Chris Leslie, the shadow financial secretary to the Treasury, said: “George Osborne should not be allowed to use smoke and mirrors to attempt to hide what’s really going on with government borrowing and debt, so it’s right that the presentation of these statistics is now reviewed.” The ONS has announced a more fundamental review of public finance statistics. It is unusual for the authority to bare its teeth at the ONS, a department for which it is both a cheerleader and a regulator. Bernard Jenkin, who chairs the public administration committee and who has been campaigning for better communication from the ONS, welcomed the move. “The [UK Statistics Authority] is established precisely for this purpose to correct any inaccurate presentation of statistics which may be misleading for whatever reason and I am very pleased the machinery is working,” he said.
Posted on: Thu, 13 Jun 2013 22:43:00 +0000
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