Quotes have been released from the Sky News interview with the Prime Minister tonight, and one catches my eye. He talks about City firms misbehaving. Kay Burley asks him how. He answers:
“What we are discovering is that there were large off balance sheet activities that were being run by some of the major companies in the world, I’m not naming any individual companies, because many companies were involved in this. They were not fully disclosed, they were therefore the problem that had to be dealt with when the markets started to fall.”
Hmm – large off-balance sheet activities? This from the man who has so far kept at least £50 billion of capital spending off the UK balance sheet in PFI deals, as our cover story spells out. Brown has applied the “creative accounting” tactics of the City to government. That’s why he’s spent literally years in arguments with the European Commission who want him to conform to financial orthodoxy and own up to the debt. Right now, for example, the Department of Health is considering whether to let NHS Trusts set up charities as debt-concealment vehicles to avoid the new accounting regulations.
So the UK government and its agencies are hiding debt from the taxpayers just as Enron did from its shareholders. And the ONS yesterday showed borrowing in Apr-Aug hitting £28.2bn, up from £16.5bn in the same period of a year ago. Receipts are seizing up, yet spending continues apace. And that’s just the debt we know about. There is a big financial scandal brewing in UK national accounts. Brown should fix that, before lecturing the City.
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