Osborne: cutting the NHS, not the deficit

Conservatives ordered to correct NHS spending claims as Osborne prepares to announce higher borrowing this year.

"I'll cut the deficit, not the NHS", declared the Conservatives' memorable poster of David Cameron at the last election. But today, as he prepares to deliver his Autumn Statement at 12:30pm, George Osborne stands accused of doing the reverse: cutting the NHS, not the deficit.

With exquisite timing, the chair of the UK Statistics Authority, Andrew Dilnot, has written to the Health Secretary, Jeremy Hunt, challenging his claim that spending on the NHS has risen in real terms "in each of the last two years". In response to a complaint from the shadow health secretary, Andy Burnham, Dilnot concludes that, contrary to recent Conservative statements, "expenditure on the NHS in real terms was lower in 2011-12 than it was in 2009-10". The most recent Treasury figures show that while real terms spending rose by 0.09 per cent between 2010-11 and 2011-12, it fell by 0.84 per cent between 2009-10 and 2010-11. In other words, Hunt is wrong to claim that the NHS has received real-terms increases "in each of the last two years".

In fairness, Dilnot rightly goes on to note that "given the small size of the changes and the uncertainties associated with them, it might also be fair to say that real terms expenditure had changed little over this period." But the point stands: the Tories promised real terms increases in NHS spending in each year of this Parliament (routinely attacking Labour and the Liberal Democrats for refusing to do the same) and they failed to deliver.

As for the deficit, Osborne will almost certainly be forced to announce that he'll miss his deficit target for this year (£119.9bn) by as much as £30bn. For the first time since the Chancellor entered No. 11, borrowing is set rise in annual terms, a significant blow to his narrative of "balancing the books". Worse, confronted by OBR forecasts showing already anaemic growth becoming even weaker, he'll likely abandon his target to have the national debt falling as a share of GDP by 2015-16 and announce that an austerity programme originally intended to last for five years (2010-2015) will now last for eight (2010-2018).

The Tories will now enter the election with debt rising as a percentage of GDP, not falling. The Chancellor is right to abandon his second fiscal rule (the first - to eliminate the structural deficit over a rolling, five-year period - is likely to be narrowly met), rather than announce even greater tightening, but he has indisputably failed on his own terms. Based on the current trend, Osborne will announce in his 2014 Autumn Statement that austerity will last for another full parliament - until 2020. To paraphrase Cameron, the bad news will keep coming.

George Osborne pictured at the launch of the Conservatives' general election campaign on 4 January 2010. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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The trouble with a second Brexit referendum

A new vote risks coming too soon for Remainers. But there is an alternative. 

In any given week, a senior political figure will call for a second Brexit referendum (the most recent being David Miliband). It's not hard to see why. EU withdrawal risks proving an act of political and economic self-harm and Leave's victory was narrow (52-48). Had Remain won by a similar margin, the Brexiteers would have immediately demanded a re-run. 

But the obstacles to another vote are significant. Though only 52 per cent backed Brexit, a far larger number (c. 65 per cent) believe the result should be respected. No major party currently supports a second referendum and time is short.

Even if Remainers succeed in securing a vote, it risks being lost. As Theresa May learned to her cost, electorates have a habit of punishing those who force them to polls. "It would simply be too risky," a senior Labour MP told me, citing one definition of insanity: doing the same thing and expecting a different result. Were a second referendum lost, any hope of blocking Brexit, or even softening it, would be ended. 

The vote, as some Remainers note, would also come at the wrong moment. By 2018/19, the UK will, at best, have finalised its divorce terms. A new trade agreement with the EU will take far longer to conclude. Thus, the Brexiteers would be free to paint a false picture of the UK's future relationship. "It would be another half-baked, ill-informed campaign," a Labour MP told me. 

For this reason, as I write in my column this week, an increasing number of Remainers are attracted to an alternative strategy. After a lengthy transition, they argue, voters should be offered a choice between a new EU trade deal and re-entry under Article 49 of the Lisbon Treaty. By the mid-2020s, Remainers calculate, the risks of Brexit will be clearer and the original referendum will be a distant memory. The proviso, they add, is that the EU would have to allow the UK re-entry on its existing membership terms (rather than ending its opt-outs from the euro and the border-free Schengen Area). 

Rather than publicly proposing this plan, MPs are wisely keeping their counsel. As they know, those who hope to overturn the Brexit result must first be seen to respect it. 

George Eaton is political editor of the New Statesman.