Lies, damned lies and Brown statistics

In a strange sort of way you have to admire our Sub-Prime Minister, not so much an economic wizard as a statistical conjurer. Not for him constant definitions, to enable comparisons between years, not for him accounting standards, as he decides what can be left out of the accounts to suit his purposes, and not for him transparency which would reveal the true picture.

The latest example is the Budget debt position. He goes on relentlessly pretending that he has not broken his principle of debt not permitted to rise to more than 40% of GDP, and that debt is now lower than it was in 1997. Even if you accept the IMF figure which he likes to quote ,(where incidentally does the IMF get its figures except from him?) and his own definitions, the current situation is higher than it was in 1997, and this means leaving out of account billions he has pumped into Northern Crock, B & B and other banks.

The Office for National Statistics recently won a battle with him to include some of this borrowing. In the third quarter of 1997 the budget deficit was 42.9% of GDP, while by September 2008 it had reached 43.4%. The latter figure was released recently, but although he had advanced warning it does not suit him to quote this figure.

If instead of the quagmire of Brownian changing definitions you accept international ones, then under OECD principles over the 11 years it has not changed, at about 53%. On a Maastrict definition over the same period there has been little change, at about 48%. These two do not net out liquid assets, but if they are removed then we are currently just below the 1997 percentage which he claims. But these two also omit the long series of off balance sheet debt which he tries to ignore.

(To all the figures quoted, and perhaps doubling them, must be added the growing public sector pension obligation, now about £1 trillion, because the pensions are not funded but merely paid out of general taxation. They are not a debt as such, but they will require payment in the future.)

To be fair to him, in his alter ego as Prudence, he did between 1997 and 2001, when he was mostly using Conservative spending plans, succeed in reducing the percentage significantly. The problem was that Prudence turned into splurge.

There are indeed some countries with a higher percentage, but over the 11 years we have moved from 11th highest up to 8th highest of the OECD league table. It has also to be remembered that 1997 was only the fourth year of growth after recession and we have had a further 10 since, as he likes to boast.

We have just had the unattractive spectacle of weekly PMQ, in particular the six questions put by Cameron and the zero answers given by Brown. The debt to GDP, - Brown definition, was quoted yet again. It's about time that the Tories greeted it in future with the derision it deserves