Britannia Radio

Osborne's Big Choice: how much of our debt to reveal

PETER HOSKIN 6:35pm

The cover of today's Sunday Times spells out what we all suspected anyway: that the Labour government left behind acre upon acre of scorched earth for the Tories to contend with.  There's the £13 billion contract for tanker aircraft, the £1.2 billion "e-borders" IT project, a £420 million spend on schools, and so on – most of them put in place just before the election.  As James said earlier, Sir Alan Budd's audit of the public finances is likely to show that things are much worse than the last Budget dared admit.

All this throws open the wider question of our debt position.  Even by Labour's measures, our national debt is likely to rise once all the hidden spending and exaggerated tax receipts are taken into account.  But, as Peter Oborne argued with typical elegance in yesterday's Mail, George Osborne has a chance to go beyond Labour's measures: by adding off-balance sheet debts like PFI and public sector pensions into the mix.  If he does so, then our debt burden could balloon from the £1 trillion, give or take, it stands at now – up to over £2 trillion.

I imagine that the new government will be minded against this approach – not least because the full picture could shock the markets into cardiac arrrest, and because other countries don't tend to add in their pensions spending.  But there's certainly a strong case for being more transparent about our national debt.  Tactically speaking, it would ram home just how precarious our situation is, and how Gordon Brown is to blame for it.  But, practically, there's an even more important reason: it's our money.