It was an awkward moment for George Osborne this morning when the results of the 4G broadband auction appeared. The sale has raised just £2.3bn – against an estimate of £3.5bn which had been factored into the government’s accounts for this year.

That missing £1bn may be a drop in the ocean compared to the £212bn of extra borrowing which the coalition is having to make compared to its ambitious 2010 forecasts.

Yet the figure is of fierce political significance. That is because it could make the difference to whether the deficit is rising or falling this year.

Two months ago Ed Balls accused the Treasury of manipulating the public borrowing figures by taking account of 4G spectrum proceeds before the auction had taken place.

That, you may recall, was the reason for his stumbling performance when he responded in the autumn statement in December. Balls simply couldn’t believe that the chancellor had been able to say that the deficit was still going down and not up. Read more