The cover of
today’s Sunday Times spells out what we all suspected anyway: that the Labour government left behind acre upon acre of scorched earth for the Tories to contend with. There’s the £13
billion contract for tanker aircraft, the £1.2 billion “e-borders” IT project, a £420 million spend on schools, and so on – most of them put in place just before the
election. As James said earlier, Sir Alan Budd’s audit of the public finances is
likely to show that things are much worse than the last Budget dared admit.
All this throws open the wider question of our debt position. Even by Labour’s measures, our national debt is likely to rise once all the hidden spending and exaggerated tax receipts are taken into account. But, as Peter Oborne argued with typical elegance in yesterday’s Mail, George Osborne has a chance to go beyond Labour’s measures: by adding off-balance sheet debts like PFI and public sector pensions into the mix.
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