The grim state of public finances

Once again, Gordon Brown has got away lightly with his gross mismanagement of the economy. Today's public finances statistics were less bad than feared, thanks to strong revenues from income and corporation tax in January, but they were pretty grim nevertheless. That is not the impression one gets scanning today's almost universally positive headlines, however.

So here is a reality check: in the financial year 2007/08 to date, public sector net borrowing -- the main measure of the budget deficit -- has already reached £26.5bn. This is a cool £6bn more than over the same period last year, and represents a horrific deterioration in the health of the public finances.

Far from having regained control of the exchequer's purse strings, Brown and Alistair Darling are still on course to breach their £38bn deficit forecast for the financial year as whole. I still suspect that the final outcome could hit £40bn.

Looking ahead, the position is even bleaker: a slower economy is bound to depress revenues even further. Brown's astonishing profligacy during the good years will eventually catch up with him -- and for all today's clever spin and all the looming tax raids on non-doms, there is nothing he can do about it.