By Rupert Carey, Anthony Reuben and Gerry Georgieva
Chief Secretary to the Treasury Laura Trott and BBC PM presenter Evan Davis got into an argument about whether UK government debt is rising or falling.
He asked her how the government could be sticking to its pledge to get debt down while talking about tax cuts.
He said official projections showed debt rising. She replied: "It's falling as a percentage of GDP" which he then disputed, saying "I'm amazed that you don't know that debt is rising".
According to the figures the government uses to measure this pledge, he was right and she was wrong.
What's happening to debt?
First, let's look at the debt target.
The pledge is that debt as a proportion of the size of the economy, measured by Gross Domestic Product (GDP), should be on track to fall in five years time.
That forecast comes from the Office for Budget Responsibility (OBR) - an independent body that looks at the government's plans on tax and spending - and makes economic predictions accordingly.
You can see in the chart below that there is a dip expected in 2028-29 compared with the previous year, which means the pledge is on track to be met.
Mr Davis was referring to these figures from the OBR when he challenged the Chief Secretary to the Treasury.
They exclude the Bank of England's balance sheet and indeed show public sector net debt rising:
- In 2023-4, it is 89.0% of GDP
- In 2028-9, it is forecast to be 92.8% of GDP
Ms Trott said she had "different figures".
We asked the Treasury which figures she was using and they gave us the OBR forecasts for debt including the Bank of England's balance sheet. We'll come back to why the Bank of England makes a difference shortly.
That figure is predicted to go up next year before falling in each of the following four years, which means it would be lower in 2028-29 than it is now.
But that is not the measure of debt that the government uses for its debt pledge, which is what Ms Trott was being asked about.
The reason you might exclude the Bank of England is that some of its activities to support the economy have involved temporary increases in debt, which are not really in the control of the government.
The documents accompanying the Autumn Budget in 2021 said: "excluding the Bank of England's contributions to public sector net debt... better reflects the impact of government decisions".
So on the measure of debt that the government uses for its own targets, it is not right to say that debt is falling or that it will be lower in five years than it is today.
Labour's shadow chief secretary to the Treasury Darren Jones said: "Laura Trott, Jeremy Hunt's number two, doesn't even know the basic facts of her job."
Talking about the debt today, Rishi Sunak said it was "on schedule" to fall.
That is correct, and different to statements he made in November 2023, when he was criticised by the statistics regulator for claiming that "debt is falling".
"Members of the public cannot be expected to understand the minutiae of public finance statistics and the precise combination of definitional choices that might need to be made for a particular claim to be true," the regulator Sir Robert Chote said.