Andrew Dilnot, at the UK Statistics Authority, chastised the Prime Minister two months ago for failing “to understand the relevant statistical definitions and to distinguish changes in the level of debt outstanding from changes in borrowing”. Chote’s letter yesterday was another rebuke.
Chote has a big reputation to live up to. The Chancellor hailed him as “one of the most credible independent voices on the public finances, taxation and public spending” on his appointment in 2010. And he’s been living up to that billing, proving such a thorn in George Osborne’s side that he was forced to abandon one of his golden rules on the public finances.
That would never have happened when the Treasury was doing its own forecasts, as Gordon Brown often made sure. Nor would the Treasury have ever publicly corrected the Prime Minister. Chote’s intervention demonstrates that the nation’s numbers are in safe hands – so long as they are kept well away from Downing Street.
West Coast shambles derails investment plans
PLUS ça change, plus c’est la même chose. That is the feeling in Britain’s rail industry. The Department for Transport (DfT) promised lessons would be learnt from last autumn’s West Coast Main Line fiasco, which saw the Government admit to “significant technical errors” in the way it handled the bidding competition for the London to Scotland line.
But fast forward seven months and the rail franchising industry is still in disarray. The Government now faces the prospect of being sued by four companies, Arriva, FirstGroup, National Express and Stagecoach, which are unhappy at losing their bid costs for the Great Western franchise.
The four rail companies spent £40m putting together bids to run services between London, Bristol and Cardiff only to be told in January that the process would be terminated to allow for a “more fundamental review” of the “large and complex” franchise.
All rail companies know that when they compete for a franchise there is a fair chance they won’t be the winner. Yet they are willing to gamble millions on entering the race because the prize is worth several billions of pounds.
In this case, though, the circumstances are different. Rail companies have lost money not because their bids weren’t good enough but because the Government had a change of heart.
The companies have until March 28 to decide whether to press ahead and sue the DfT. There is still chance of a compromise being reached.
However, this latest episode proves that the trust between the DfT and rail companies is fundamentally broken.
What’s worse, investors are fast
losing faith and that is where the
real danger lies. The Government
hopes to secure as much as £20bn
from pension funds to finance infrastructure projects in the UK, from power stations to high-speed rail. The Great Western fiasco hardly suggests
that it is a reliable investment partner.