Sunday, February 20, 2005

Lies and damned lies

The Office of National Statistics has decided that it will now treat road repairs as capital rather than revenue expenditure. That's to say that repairing a road has become an investment, and not, well, a repair. According to the Times:

The ONS denied that it had been leant on by Mr Brown or the Treasury to make any changes to how it calculates its statistics, saying that the revisions had been decided on as part of the normal review of methodology. “There was absolutely no improper influence. There was a joint study with Treasury statisticians but the decision to make the revision was made by the National Statistician alone, and its implementation fully accords with the National Statistics Code of Practice,” a spokesman said.

This is so blatantly the government cooking the books as to make the ONS denial of political involvement in the decision look laughable. Do they really expect us to believe that something as huge in scope and as basic in nature as road repairs suddenly needs to have a revised treatment in the national accounts? I could understand it if we were talking about something complicated like foreign exchange or interest rate hedges, but this is road repairs for heaven's sake. The nation has been repairing things since before the Conquest. We have been accounting for repairs since double entry bookkeeping was invented. What has changed now?

The rules for accountants on what is revenue and what is capital expenditure are pretty clear: repairs are revenue, improvement is capital. You don't see the Accounting Standards Board spending months discussing whether property repairs should be capitalised. So why is it different for government? I can't imagine what sort of rules the ONS has for distinguishing the two but they are clearly not the same as the rules that are enforced on the rest of us.

The answer is easy of course. It's different for government because Gordon needs it to be different.

When you think about it, it's pretty unlikely that anyone is going to believe anything put together by a combination of politicians and statisticians anyway. The Tory policy of making the ONS independent is therefore a sound one, although let's face it, not one that is going to sway many punters at the polling booths. Meanwhile it's up to the commentariat to point out every time a set of government figures is released, that they cannot be trusted because their production is under the malign influence of politicians. This is the only way we might embarrass them into change.