1999 - Year Of The Porkie: Specialists in talking up the figures

New Labour's presentation techniques, particularly when it comes to boasts of public spending, need close scrutiny
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Indy Lifestyle Online
A year of deceit or a year of delivery? Tony Blair told the House of Commons last week that New Labour had delivered on its promises, but many have been left astonished by some of the statistical sleight of hand that his Government has used

New Labour has invented a revolutionary statistical technique this year - cumulative accounting.

Ask a Labour politician how much extra the Government will be spending on health and education over the next three years and they will reply pounds 40bn. It is a boast that has a similar smoke and mirrors quality to it as Jack Straw's pledge of 5,000 additional policeman. If you had presumed "additional" meant 5,000 more officers than already existed, you would have been mistaken. What Straw meant was 5,000 more recruited, which amounted to no net gain in total figures because of the number of officers leaving the force.

Maurice Fitzpatrick, a partner at the leading accountants Chantrey Vellacott DFK, says: "Government figures aren't strictly speaking wrong; they are just grossly misleading. The way this Government counts, a baby who grew two inches every year for three years would be 12 inches taller, not six."

This is achieved by the following method. If, for example, spending in the first year was pounds 10bn and pounds 2bn was added for each of the next three years, instead of that being an increase of pounds 6bn, Labour would describe it as an increase of pounds 12bn. They justify this by saying that the spending of pounds 14bn in the second year is a pounds 4bn increase on the initial pounds 10bn; third- year spending of pounds 16bn thus represents a pounds 6bn increase: pounds 2bn plus pounds 4bn plus pounds 6bn equals pounds 12bn.

Richard Spring, a Conservative culture spokesman, who recently asked the House of Commons Library to independently explain how the health and education departments arrived at their spending figures, has long been puzzled by Labour's claims. "This proves that the Government figures are spurious," he says. "There isn't a country in the world that uses figures like this."

According to the House of Commons Library, the education department's claims that it has been allocated an additional pounds 19bn for the UK over three years is calculated by subtracting the 1998/99 expenditure total - pounds 38.3bn - from each of the next three years' spending. This gives "additional" expenditure of pounds 3bn in 1999/00, pounds 6.5bn in 2000/01 and pounds 9.7bn in 2001/02.

An identical method is used to arrive at the health department's claim that spending will increase by pounds 19bn over the next three years.

In more traditional accounting terms, on education the Government is spending an extra pounds 9.7bn, and in terms of extra cash left after inflation and rising costs the figure is pounds 6.1bn. In health the actual extra cash is pounds 8.5bn over three years, which represents a real-terms increase of pounds 5.4bn.

What is most mystifying is why the Government feels the need to inflate figures.

One senior Government adviser says: "There is a growing concern that this is going to backfire. Either we keep pushing out these figures until they become preposterous or we shift and the Tories turn around and say, `Hold on, you were giving pounds 40bn, now you're giving only pounds 20bn'."

Mr Fitzpatrick says: "I have never seen this approach before, and I'm no mean statistician when it comes to proving things. I've kept quiet because I have no axe to grind with the Government, but this is verging on fraudulent.

"If this money was going into health and education over and above normal increases brought about by inflation, wages increases etc, it would make a measurable difference, but these claims are based on the presumption that you wouldn't as a matter of course have put more money into education year on year."

Messrs Fitzpatrick and Spring don't deny that more money is going into health and education but suggest Government ministers should be quoting slightly less impressive headline figures.

A senior partner at a major accounting firm says: "If a sales director tried to massage figures like this, he'd be sacked."

A Treasury spokesman refused to accept that the figures were misleading but instead referred to the real-terms increases instead of the pounds 40bn headline figures quoted by ministers.

Nick Brown, the Agriculture minister, incurred the wrath of the agriculture select committee last week by trying to suggest that farmers hit by BSE had been given pounds 500m in government aid when the total amount of new money amounted to only pounds 1m.

And the Chancellor found himself struggling to sustain the line that taxes are falling under New Labour after the Treasury's own figures showed that the tax burden had risen significantly.

However, when it comes to statistical gerrymandering, even Labour haven't been able to beat the Tory feat of altering the way unemployment figures were calculated more than 20 times - proving in politics that there are lies, damned lies and statistics.

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