Another breathtaking Brownie at the Prime Minister’s press conference today:
“I have to say we face this situation with relatively low national debt because of the steps we have taken since 1997, where we wiped off perhaps more than around £100 billion of debt by reducing the proportion of debt in our national income.”
Huh? The ONS is unequivocal: net debt was £351bn in May 1997 and £632bn in August – or £545bn if you exclude Northern Rock. So where is his “wiping out” of £100 billion? Normally with a Brownie you can see how he cooked up the fake figure. But this time, it really does look like he just made it up.
Consider this for a moment. As Brown chastises bankers for dishonest off balance sheet accounting, he is concocting figures live on national television. There has never been a greater need for honesty but Brown remains unable to level with the public about the amount of debt his government has saddled us with. A reminder that the malaise Brown so piously diagnoses in the City – creative accounting – remains at the heart of his own treatment of government accounting.
UPDATE: Two explanations kindly offered by CoffeeHousers.
1. Chris S says debt as a share of GDP is lower if you were to strip out Northern Rock (which taxpayers, alas, cannot do). I accept that, but Brown told us he’d wiped out £100bn. This is what mystifies me: it’s a sum, not a ratio, expressed in sterling. Where does that figure come from? 2. Toby says that it was true a few years ago that he’d paid off £100bn of debt – and subsequently increased it. So (tell me if I’m getting you wrong here, Toby) Brown meant to say “we had wiped off £100bn of debt, before we jacked it all up again, which is why we’re in a good position.” But this doesn’t square with the figures. In May97, net debt was £351bn and the lowest it reached was £304bn in Feb01. At no point was £100bn paid off, even after the 3G selloff.
There is normally a technical explanation behind Brownies – which is why I don’t call them “lies”. He’s normally quite careful – they are usually gross and wilful distortions of the truth (like a metric switch, for example, one of his favourite techniques). Normally Brown’s like a magician at a kiddie’s party – you can always see the trick. But this one defeats me.
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