On the money with Mario Christodoulou

George Osborne is the latest in a long line of politicians who have tried to
play politics with the numbers and ended up burned. “George Osborne accuses
Labour of hiding £14bn tax ‘bombshell’,” screamed the headline in The Daily
Telegraph.

Osborne said: “Labour’s secret spending plans appear to reveal an income tax
bombshell.”

The Treasury, it seems, expect gross income tax receipts to increase from
£144bn in 2010 to £162bn in 2011/2012.

About £2.5bn will come in through new tax hikes and other initiatives.
Economic growth will also lead to higher tax revenue and have been figured into
tax estimates.

However, Osborne believes the government estimates are short £14.8bn.
Incidentally, that BANG! you just heard was the sound of the income tax
bombshell, exploding.

Or perhaps not. Perhaps it was the sound of the camel’s back finally breaking
over at HMRC. According to The Times senior Treasury officials
described Osborne’s £14.8bn figure as “unexplained”. They also took issue with
the suggestion of deception. “The idea that we are party to hiding something
from the public has incensed people here,” one official said.

Osborne has now been forced to defend his claims.

Accountancy Age’s revelation last week that the government planned to leave
£32bn in debt off its public accounts led the Tories to come out swinging again,
accusing the government of “taking the public for fools”.

In this case, perhaps they have a point. There’s a pretty clear argument to
make here – the public are only privy to a set of numbers which is, to all
intents, censored. The issue plays into a larger theme destined to be at the
centre of the next election – fiscal credibility. The sure money is that it’ll
be down to the accountants to shine through the political fog.

Mario Christodoulou is a reporter for Accountancy Age