Cooking the books

Northern Rock is £110 billion of public debt.  An amount which “blows a hole” in the Treasury’s “sustainable investment rule” – that the debt-GDP ratio shouldn’t go higher than 40 percent.  It’s simple – now let’s look forward to Alistair Darling squirming as he delivers next week’s Budget.

The only problem is that the Government looks set on keeping the Rock debt off the public balance sheet.  So it won’t affect the sustainable investment rule, and Darling can meet all his targets.  There’ll be no squirming after all.

Their reasoning?  That the Northern Rock burden is so “temporary and exceptional” that it needn’t trouble the fiscal rules.  Never mind that the Office for National Statistics has insisted that the debt be included on the public balance sheet.  Never mind that the Government’s idea of “temporary” is a whole lot different from everyone else’s.  So long as those fiscal rules are met, it must all be ok…