George Osborne’s attempt to flatter the official headline measures of the public finances came unstuck on Wednesday after the UK Statistics Authority reprimanded the Office for National Statistics for treating the Treasury’s raid on the Bank of England as equivalent to tax revenues.
Upholding a complaint from the Financial Times about the ONS decision, the statistics watchdog called for a review of the headline measures of public borrowing and debt.
The decision will stop the chancellor from claiming borrowing is lower merely because funds have been moved from one part of the public sector to another, and demonstrates that the UKSA is willing to criticise the statistical work of its own government department as well as ministers.In November, Mr Osborne announced he would repatriate to the Treasury the funds building up under the quantitative easing scheme in the Bank of England arising from interest payments on the debt owned by the bank.
The Treasury hoped this raid would improve headline figures of government borrowing, helping Mr Osborne to meet his fiscal rules and say borrowing was falling, despite the weak economy.
Initially the ONS agreed with the Treasury’s arguments, but this has now been overturned by the UKSA, which said the counter arguments made by the FT were “more persuasive”.