Is There A ‘Blackhole’ That Needs Austerity Ii ?

[Gromit]

It seems the Government have changed the rules for calculating debt.

Where previously there would have been a £14Billion to spare, the new way of calculating reveals a £60Billion ‘blackhole’ in the country’s finances.

A hole which they say will need 5 years of austerity cuts to balance out.

// Reversing a decision to exclude the Bank of England's debt from the government's own debt figure, made in January 2022, "completely wipes out the projected 'fiscal hole' and, on the official forecasts, leaves the government with an additional £14bn to spend against its own debt targets by 2027", they said.
As chancellor, Rishi Sunak previously used a different accountancy rule in 2020 and 2021 to arrive at his chosen figure for government debt. //

https://www.bbc.co.uk/news/business-63573989

All very strange, don’t you think ?

[douglas9401]

I'm sure the science of smoke and mirrors is far beyond the comprehension of mere mortals Gromit.

Best just believe in the expertise of those doing a sterling job and not worry.

Someone will be along shortly to ask 'what I would do then?'. :-)

[ToraToraTora]

Well I'd say it was odd to exclude the BOE debt from the overall figure so now we are working with a more accurate figure. What is "strange"?

[jno]

nothing strange about a Tory changing the rules to suit himself, surely?

[ToraToraTora]

jno: "nothing strange about a Tory changing the rules to suit himself, surely? " - surely this is the opposite it now looks a lot worse than it did.

[Gromit]

// What is "strange"? //

That they have been happily using the ‘wrong’ formula for years.
That they have only just confessed their ‘error’.
That they have not apologised for the error screwing up the UK's finances.

[jno]

if it's such a good argument, why didn't he adopt it before? He was chancellor for a quite a while. But making it look worse than it is gives him a better excuse to grind the faces of the poor. A good time to be a gazillionaire non-dom.

[perseverer]

I might say I am no expert, actually I have very little idea what they are talking about, but I would point out that this has been raised by the Progressive Economy Forum, a group which campaigns against Austerity, and I always caution when a group with an axe to grind is involved, rather than something emanating from an independent body.

[Old_Geezer]

At least someone has at last found the magic money tree.

[Old_Geezer]

Anyway, this is exactly what accountants are trained for. Politicians do something similar with legislation.

[youngmafbog]

//surely this is the opposite it now looks a lot worse than it did.//

Chew on that jno.

[ToraToraTora]

If it was the other way round, jno and the 5C would be accusing the government of trying to make a deficit look like a surplus! PMSL! You can't win!

[Gromit]

As it appears now, it looks like Sunak recklessly over borrowed, and used some creative accountancy to hide the fact.
Now he can cut expenditure on the things poor people need, and use the saving to creatively treat his friends and allies.
And barring a miracle, annihilation in 23 months (but a lot richer).

[jno]

jno and the 5C would be accusing the government of trying to make a deficit look like a surplus

classic argument: make something up, attribute it to someone else and then criticise them for saying it...

[jno]

lol, and here's Kwarteng saying "I told Truss not to do it!"

https://www.theguardian.com/uk-news/2022/nov/10/kwarteng-told-truss-to-slow-down-radical-measures-after-mini-budget

Always someone else's fault, isn't it. Anyone but the party in power for the last 12 years.