Thread by @BenChu_

There's a bit of puzzle about this government's capital spending announcements.

They're committed to spending quite a lot more - getting it to 3% of GDP in the next couple of years... 1/

...And yet ministers keep re-announcing old capital spending, trying to pass of re-allocated underspends as new spending (see @IFS here)...2/

ifs.org.uk/publications/1…

...or announcing spending that manifestly doesn't come close to meeting what they say they're doing. See today's £160m for offshore wind or the recent £3.7bn for 40 new hospitals (estimated cost £500m each)...3/

independent.co.uk/environment/bo…

...These kind of misleading techniques on spending announcements usually come from governments which are hard up against their own fiscal rules. But this government actually has lots of fiscal headroom.

So what's going on? Why is it playing these games?... 4/

A couple of possibilities. a) they're trying to walk back from their own headline capital spending plans because they're spooked by the Covid impact on the public finances
b) they're keeping their powder dry for the Spending Review when all that REAL money will be allocated...5/

...and want to string out the "investment splurge" headlines as long as possible.

I suspect it's b) but this is certainly worth keeping a careful eye on...6/

Fuller analysis for @indypremium here 👇independent.co.uk/independentpre…