Scorched earth
IF THERE is one more depressing sight than a Conservative Chancellor who lets public spending rip, it is his fan club telling him how clever his scorched earth policy is. By spending all the money, he will leave none for Labour. European rules (econo- mic convergence, and all that) would, says the fan club, stop future governments from borrowing any more than he looks like borrowing now. Oh, yes? No such rule impedes the Italians, whose public finances lack any visible means of support. Our own Treasury is expert at creative accounting. It could (as Peter Warburton at Robert Fleming suggests) change its depreciation policies, writing off its investment in de- fence over five years and not, as now, over one — what a saving! The sanction against governments which over-borrow is that their credit deteriorates and finally runs out — irrespective of Euro-rules, and for that matter irrespective of party.
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