Chancellor Gordon Brown is creating a black hole in his spending plans of£50bn over five years - plus £21bn in contingent liabilities for Network Rail, according to projections from the Liberal Democrat Treasury team.
Accountancy Age, 09 Dec 2002
Shadow chancellor Matthew Taylor warned that without action to boost business investment, 'fudged figures' in Brown's forecasts would threaten his plans for schools and hospitals.
He predicted a £10bn-a-year shortfall - equal to a third of the increase in health spending planned over the period.
Taylor claimed his figures 'show that Gordon Brown fudged the figures in adesperate attempt to avoid having to forecast even higher borrowing figures'.
He added: 'In the last parliament Gordon Brown was inclined to use verycautious assumptions in order to tuck away revenues for a rainy day - but nowthis strategy has changed by 180 degrees!'
He claimed Brown's original growth figures were based on population growth estimates above those of the Government Actuary. They include faster increases in productivity and the assumption that corporation taxes will grow in line with GDP - above long term averages despite cuts - and they disregard a fall in tobacco revenue resulting from easing cross border rules and rising VAT trader fraud.
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