Forget about the figures

The thoughts of Evan Davis on the pre-Budget report, are, as always worth reading. But I was particularly taken with this:

In January 2005, the Institute for Fiscal Studies (the most respected independent analysts of the public finances) published projections showing that unless the government changed policy by raising taxes or cutting spending, it would be borrowing £10bn this year (on the Golden Rule measure).

Two months later, Gordon Brown published projections showing a surplus of £4bn for this year. In other words, there was a £14bn pound gap between the chancellor and the IFS.

Since those projections were made in 2005 there have been four budgets or pre-budgets, which have between them announced tax rises raising £4bn this year.

So, if we do end up borrowing £5bn this year, the IFS will be seen to have been almost bang on back in 2005, while the Chancellor was overly-optimistic by about £13bn.

Why was I taken with it? Because it is an excellent illustration of how bogus the whole "sums don't add up" campaign nonsense is.

Even if the Chancellor and not the Tories was correct, the gap between the revenue from a non-Doms charge and the inheritance tax would be in the region of £2bn.

Yesterday the Prime Minister argued repeatedly that this sort of change would leave the economy "in disarray".

From Evan's analysis one can see that adjustments being made without much fuss to the Government's estimates are more than six times larger than the so-called gap in the Tory figures.

The issue is not who is right and who is wrong in the battle over the figures. I don't suppose we'll ever really be sure.

The issue is whether it matters.