Gordon Brown has been forced to adopt accounting practices that will reveal the Treasury's liabilities. A victory for common sense, and perhaps, one day, for David Cameron
So, it looks like Gordon Brown’s been rumbled. In this week’s issue we’ve reported that the Treasury is being more-or-less forced by its own advisory board to adopt more sensible accounting practices.
Sounds a bit boring, huh? Yep, but it is a significant move. The treasury has used a bizarre method to account for the PFI for years – and this is why the liabilities are so rarely found on the government’s balance sheet. If the accounting change goes through, the government will very likely see billions of pounds moved on to its balance sheet.
This moves Brown perilously close to breaking his own oft-trumpeted rule of not allowing national debt to exceed 40% of GDP. In itself, being a few quid over 40% is not important. But Brown has been so boastful of this success in recent years that it cannot be ignored.
Unfortunately for Brown, the impact is unlikely to be felt until he reaches Downing Street. The Treasury record that secured his place at Number 10 could well be the thing that starts to unravel his premiership. More than ever, he will be accused of having fiddled the books. Will his defence be that hundreds of hospitals, schools, roads, prisons and houses were built only because of the PFI be a suitable defence?
I suspect it won’t wash – and that’s not to say that I don’t sympathise with the defence.
Though I would find a pre-election debate on PFI potentially rivetting, I suspect that UK voters may be yearning for something more glamorous. Especially compared to the US presidential election. Brown's off balance sheet accounting will be no match for dynamic candidates such as Barck Obama and Rudolph Giuliani, and the fact itis the first time that a sitting president or vp won’t be running for office since the 1920s.
Time magazine this week suggested that David Cameron has a sense of JFK-style Camelot about him. Brown’s got a rocky road ahead – and getting the nation in debt isn’t going to help him negotiate it.