The Staggers 20 February 2013 Osborne faces failure on the deficit after 4G auction falls short Ed Balls set for revenge after 4G auction raises £1.16bn less than expected. Print HTML George Osborne wrongfooted Ed Balls at last year's Autumn Statement when he announced that, contrary to expectations, the deficit was forecast to fall, not rise this year. The shadow chancellor was jeered by Osborne and Cameron as he repeatedly stumbled over his pre-prepared attack lines, prompting Osborne to declare: "That was the worst reply to an Autumn Statement that I have ever heard in this house. He said one thing that was true, he said it right at the beginning. He said the deficit wasn't rising. It was a Freudian slip." As Balls later explained: "The outside forecasters were all expecting a rise in borrowing this year, because it has risen for the first seven months ... it was impossible to work out in that first minute or two what was going on." It was only after Balls had replied that Osborne's creative accounting emerged. In a trick worthy of Enron, the Chancellor had banked the expected £3.5bn receipts from the 4G mobile spectrum auction - even though it had yet to take place. Had he not done so, the Office for Budget Responsibility would have forecast a deficit for this year of £123.8bn, £2.4bn higher than in 2012. But the Chancellor's trickery has now backfired. As Alex reports, the 4G auction raised £2.34bn - £1.16bn less than expected. As a result, when he delivers the Budget on 20 March, Osborne will almost certainly be forced to announce that the deficit will be higher this year than last. Borrowing so far this financial year is £7.2bn (7.3 per cent) higher than at the same point last year, leaving Osborne £4.86bn short after the inclusion of the 4G receipts. Somewhere in Yorkshire, Keynes's rottweiler is already planning his revenge. › Morning Call: pick of the papers Chancellor of the Exchequer George Osborne attends a press conference at the Treasury in Whitehall on February 6, 2013. Photograph: Getty Images. George Eaton is political editor of the New Statesman. From only £1 per week Subscribe More Related articles Could Labour lose the Oldham by-election? Let 2016 be the year that Ireland gives women the right to choose Does the UK care enough about climate change to admit it is part of the problem?