Will the Lib Dems cave in to Osborne over deeper cuts?

Ahead of the Autumn Statement, the Chancellor is considering even larger cuts in order to meet his debt target.

One of the biggest dilemmas facing George Osborne ahead of the Autumn Statement on 5 December is whether or not to abandon his pledge to have the national debt falling as as a percentage of GDP by 2015-16. Economic growth of just 0.6 per cent over the last two years has left the government on course to borrow around £190bn more than originally intended. In March, the Office for Budget Responsibility forecast that debt would fall from 76.3 per cent in 2014-15 to 76 per cent in 2015-16 (thus meeting Osborne's target), but the IMF has more recently predicted that it will rise from 78.8 per cent to 79.8 per cent.

With this in mind, the government briefed in September that it would abandon the target. The Times (£) reported that Osborne, with David Cameron's agreement, was "ready to take a political hit on missing the target rather than face the 'nightmare' of further cuts."

But better-than-expected growth and borrowing figures have prompted a rethink, with Osborne now considering whether he could still meet the target by announcing even deeper spending cuts. In today's Telegraph, Peter Oborne writes that the Chancellor "wants to stick to his original economic strategy – a position he outlined eloquently during his speech to the Conservative Party Conference." The biggest obstacle to him doing so is the Lib Dems. Nick Clegg and Vince Cable have repeatedly said that they will not accept a "penny more" off public spending (or "a penny less"). Osborne could have attempted to win his coalition partners round by offering them some form of wealth tax, but he has already ruled out a "mansion tax" and rejected Clegg's call for an emergency tax on the rich.

It remains to be seen how the stalemate will be broken. As Oborne writes, "Osborne has nowhere to hide. Either he must give in to the Lib Dems, or the Lib Dems must give in to him." Should the Lib Dems blink first, it would be one of their biggest betrayals yet.

Nick Clegg has said that he will not accept a "penny more" off public spending. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Emily Thornberry heckled by Labour MPs as tensions over Trident erupt

Shadow defence secretary's performance at PLP meeting described as "risible" and "cringeworthy". 

"There's no point trying to shout me down" shadow defence secretary Emily Thornberry declared midway through tonight's Parliamentary Labour Party meeting. Even by recent standards, the 70-minute gathering was remarkably fractious (with PLP chair John Cryer at one point threatening to halt it). Addressing MPs and peers for the first time since replacing Maria Eagle, Thornberry's performance did nothing to reassure Trident supporters. 

The Islington South MP, who voted against renewal in 2007, said that the defence review would be "wide-ranging" and did not take a position on the nuclear question (though she emphasised it was right to "question" renewal). She vowed to listen to colleagues as well as taking "expert advice" and promised to soon visit the Barrow construction site. But MPs' anger was remorseless. Former shadow defence minister Kevan Jones was one of the first to emerge from Committee Room 14. "Waffly and incoherent, cringeworthy" was his verdict. Another Labour MP told me: "Risible. Appalling. She compared Trident to patrolling the skies with spitfires ... It was embarrassing." A party source said afterwards that Thornberry's "spitfire" remark was merely an observation on changing technology. 

"She was talking originally in that whole section about drones. She'd been talking to some people about drones and it was apparent that it was absolutely possible, with improving technology, that large submarines could easily be tracked, detected and attacked by drones. She said it is a question of keeping your eye on new technology ... We don't have the spitfires of the 21st century but we do have some quite old planes, Tornadoes, but they've been updated with modern technology and modern weaponry." 

Former first sea lord and security minister Alan West complained, however, that she had failed to understand how nuclear submarines worked. "Physics, basic physics!" he cried as he left. Asked how the meeting went, Neil Kinnock, who as leader reversed Labour's unilateralist position in 1989, simply let out a belly laugh. Thornberry herself stoically insisted that it went "alright". But a shadow minister told me: "Emily just evidently hadn't put in the work required to be able to credibly address the PLP - totally humiliated. Not by the noise of the hecklers but by the silence of any defenders, no one speaking up for her." 

Labour has long awaited the Europe split currently unfolding among the Tories. But its divide on Trident is far worse. The majority of its MPs are opposed to unilateral disarmament and just seven of the shadow cabinet's 31 members share Jeremy Corbyn's position. While Labour MPs will be given a free vote when the Commons votes on Trident renewal later this year (a fait accompli), the real battle is to determine the party's manifesto stance. 

Thornberry will tomorrow address the shadow cabinet and, for the first time this year, Corbyn will attend the next PLP meeting on 22 February. Both will have to contend with a divide which appears unbridgeable. 

George Eaton is political editor of the New Statesman.