OBR head rebukes Osborne: the UK was never at risk of bankruptcy

Office for Budget Responsibility chief Robert Chote dismisses the "danger of insolvency".

In the weeks after he took office, George Osborne justified his austerity programme by claiming that Britain was on "the brink of bankruptcy". He told the Conservative conference in October 2010: "The good news is that we are in government after 13 years of a disastrous Labour administration that brought our country to the brink of bankruptcy."

It was, of course, nonsense. With its own currency, its own monetary policy and the ability to borrow at historically low rates, the UK was never at risk of bankruptcy. In extremis, the Bank of England could simply buy up government debt (as it has done through its quantitative easing programme).

So it was pleasing to see the head of the Office for Budget Responsibility (OBR), Robert Chote, state as much on last night's edition of Newsnight. He told Jeremy Paxman (from 15:17):

In terms of thinking about whether the government's finances are sustainable, a key difference [between the UK and the eurozone] is that we are in a position where we have our own currency and in that sense we have a greater degree of flexibility that means the notion of the danger of insolvency is a much different question for us.

Having established the OBR to act as a check on the government (something for which Osborne deserves praise), the Chancellor might want to listen to its head and finally concede that there was no basis for his claim in 2010.

Office for Budget Responsibility head Robert Chote at the body's briefing on the Autumn Statement yesterday.

George Eaton is political editor of the New Statesman.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.