Spend, spend, spend: George Osborne’s big cover-up

If anyone knows the dark arts of the Treasury, it is Damian McBride, Gordon Brown’s disgraced former spin-doctor.

He believes George Osborne has comprehensively leaked details from this week’s Autumn Statement - a £2bn bonus for the NHS, how £15bn will be spent on new roads - because the numbers on the economy the Chancellor will be releasing on Wednesday are so grim.

McBride, who was a Treasury insider before having to resign from the last Labour government for exercising his own dark arts, told Andrew Neil on the Sunday Politics that the more Osborne spins his package to gain good headlines today, the worse it must be.

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“Why is he out there so early announcing what should be the centrepiece of the Autumn Statement?” asked McBride.

“It could be that he has had to concede [that] on the day it is going to be pretty bad news and that the focus is going to be borrowing numbers and a downgrade of any future growth figures… so he will at least get one day of good news headlines.”

It is the second time in a matter of days that the government has been guilty of such spin. On Friday morning, Cameron succeeded in gaining a series of headlines declaring “PM gets tough on immigration” only to deliver a speech on the subject that avoided caps, quotas or an “emergency brake” following the intervention of German Chancellor Angela Merkel.

Already, the Chancellor’s spending package is beginning to unravel. After grabbing the Sunday headlines with his “£2bn boost to avert NHS crisis”, today’s newspapers are picking Santa’s parcel of goodies apart.

The Guardian reports that £750 million of that £2bn is actually “recycled Health Department cash” already allocated to the NHS, while everyone quickly spotted that the £15bn road-building package had already been announced last year: all that was revealed today were the actual individual projects.

Furthermore, while a one-off £2bn “bandage” for the NHS may be welcome, it isn’t a long-term cure. Simon Stevens, the head of the NHS who called for an extra £8bn to avert a crisis in the NHS, said the £2bn was a “down payment” - but it will have to be found again in future years. That will be a tall order for a cash-strapped government, whoever wins power inMay.

So, how bad might the figures be when George Osborne finally gets to his feet in the Commons on Wednesday afternoon?

The Independent reports that the government will be forced to borrow an extra £75bn over the next five years to meet the shortfall caused by lower-than-expected revenues from income tax (because so many of the newly employed are not earning enough), from stamp duty (because so few people can afford to move house) and from North Sea oil tax receipts (because of the big drop in the price of oil).

As the Indie puts it, this is “a damaging blow to Osborne’s hopes of claiming that the government has the country’s deficit under control.”

Even the Tory-supporting Daily Mail is sceptical, reporting "the Chancellor will not be able to deliver the budget surplus he has promised until 2019-20 – a year late. And it casts doubt on his plans for £7billion of tax cuts for the middle classes [promised by the Prime Minister in his party conference speech] after the election."

Meanwhile Nick Clegg was doing his own spinning operation this morning from Stonehenge, where a new road tunnel is to be built under the World Heritage.

His main message was to distance himself from Osborne’s plan to meet rising government costs through further cuts in welfare spending in the future.

“There is a major difference of opinion between myself and the Conservatives about the role of taxation,” Clegg told the Today programme’s Jim Naughtie. “The Conservatives will only balance the books on the backs of the working age poor. My party believes you have got to finish the job but finish the job fairly…” (by which he means higher taxes on the wealthy).

Clegg tried to dismiss the suggestion that the road-building projects had been decided on political grounds – though he can hardly deny that the A303 serves the West Country where the Lib Dems are desperate to hang on to a raft of seats.

The Daily Telegraph reports that two-thirds of the road schemes announced today will go through Tory and Lib Dem seats.

As the Financial Times predicted this morning, “With an eye on marginal seats at the next election, Conservative and Liberal Democrat ministers will vie to take the credit for schemes that also include the improvement of the A47 into Norfolk and the A1 between Newcastle and Edinburgh.”

The Mole can hardly remember so much government spin being spun since, well, the era of Brown and McBride.