Politicians are not known to hone faithfully to the truth about anything. Perhaps the survivor principle demands that those who remain in office in a Pinocchio world, can only do so by out-lying everyone else. They must all end up with enormously long noses. For sure, they always succumb to the need to bend statistical data.
John Kay writes today (Financial Times, March 13, 2013) about data-bending by a succession of British governments, most especially since the Thatcher government began to take an unhealthy interest in how official statistics were compiled. The Gordon Brown administration ‘took statistical prestidigitation to new heights’:
“The economic cycle was redefined several times, always with the result that the target of controlling borrowing over the cycle had, despite appearances, been met. The status of Network Rail and its financing arrangements were reformulated several times to pretend the body responsible for Britain’s rail infrastructure was not an agency of government – which it manifestly was – and that its borrowings were not guaranteed by government – which markets knew they were; an episode of which the mandarins of Yes Minister would have been proud.” John Kay, ibid.
According to John Kay, the Coalition Government initially seemed willing to allow the numbers to tell their own story. No longer, apparently, as the debt crisis continues unabated:
“The British government recently assumed the $37 billion liabilities of the Royal Mail pension fund. As a result, government borrowing was reduced by $28 billion. Yes, you read it correctly. The explanation is that, by convention, unfunded pension liabilities do not represent government borrowing while, by a different convention, public assets intended for sale – such as securities formerly held by the Royal Mail fund – may be offset against borrowing. And as my colleague Chris Giles has explained, the government has also decided the interest the Bank of England receives on the securities purchased through quantitative easing should be credited to the government’s revenue account. Nothing of substance has changed but the reported public deficit is reduced to a level consistent with the government’s borrowing targets.” Kohn Kay, ibid.
No person of sense should ever take much account of the conventional wisdom!