Given the inaccuracies of measuring public debt, it seems rather strange that it should matter whether the golden rule used by Gordon Brown has been passed or failed by a measly £6bn. A classic example of why this is the case came a few weeks before the budget. The Office of National Statistics discovered that they had double counted road maintenance spending as current when they tried to reclassify it as investment, exepting it from the golden rule calculation.

A distinction between current and investment expenditure is an issue that all companies have to consider. However, accounting standards resolve this by allowing capitalisation of investment and depreciation over its economic life. If the public sector used a similar approach in determining future investment needs then this would provide an alternative way of determining whether a particular amount of debt was sustainable or not.

The real problem is that public sector accounting is still deeply wedded to cash concepts. The advantage of these is that cash accounting is consistent with the ways that taxation is collected. However it does make the concept of a golden rule and borrowing only for investment somewhat arbitrary. Perhaps it is a better example of political salesmanship than economic logic.