Our political leaders need to stop falling for fiscal illusions

Analysis: Ministers are afflicted by a double fiscal pathology, says Ben Chu. First, there’s a naïve obsession with headline government borrowing. Second, there’s a chronic neglect of the asset side of the government’s balance sheet.

The are fears the chancellor could respond to the student loans accounting change by tightening repayment terms (Getty)

The good news is that the illusion is shattered. The bad news is that there’s still a danger the tail will wag the dog. The solution? Train the dog to be better behaved.

Let me explain. The student loans accounting loophole is being stitched shut by the Office for National Statistics.

This is a good thing because it will end the fiction that the government is not borrowing today to help young people go to university today.