Complaint
The programme included a discussion of the challenges facing Rachel Reeves’ successor as Chancellor of the Exchequer in which one of the participants was Paul Johnson, the former Director of the Institute for Fiscal Studies. A listener complained that Mr Johnson’s comments on the economic impact of increased government borrowing were inaccurate and misleading because it did not reflect the fact that government spending creates new money, meaning that borrowing in the bond market is a political choice, not a financial necessity. The ECU considered the complaint in the light of the BBC’s editorial standards of accuracy.
Outcome
While recognising that the view put forward by the complainant represented a valid theoretical account of the financing of government, the ECU noted that in practice it was subject to constraints of market confidence which provided a strong deterrent to sustained government spending unfunded by either taxation or borrowing. Mr Johnson’s explanation of why governments cannot increase their borrowing indefinitely reflected the same understanding of the issue as is held by HM Treasury, the Debt Management Office and the Office for Budget Responsibility, and the ECU considered this met the standard of accuracy appropriate for a discussion which aimed to throw light on the challenges facing an incoming Chancellor, rather than to explore the theory of government financing.
Not upheld
