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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Jeremy Corbyn challenged by Labour MPs to sack Ken Livingstone from defence review

Former mayor of London criticised at PLP meeting over comments on 7 July bombings. 

After Jeremy Corbyn's decision to give Labour MPs a free vote over air strikes in Syria, tonight's Parliamentary Labour Party (PLP) meeting was less fractious than it could have been. But one grandee was still moved to declare that the "ferocity" of the attacks on the leader made it the most "uplifting" he had attended.

Margaret Beckett, the former foreign secretary, told the meeting: "We cannot unite the party if the leader's office is determined to divide us." Several MPs said afterwards that many of those who shared Corbyn's opposition to air strikes believed he had mishandled the process by appealing to MPs over the heads of the shadow cabinet and then to members. David Winnick declared that those who favoured military action faced a "shakedown" and deselection by Momentum activists. "It is completely unacceptable. They are a party within a party," he said of the Corbyn-aligned group. The "huge applause" for Hilary Benn, who favours intervention, far outweighed that for the leader, I'm told. 

There was also loud agreement when Jack Dromey condemned Ken Livingstone for blaming Tony Blair's invasion of Iraq for the 7 July 2005 bombings. Along with Angela Smith MP, Dromey demanded that Livingstone be sacked as the co-chair of Labour's defence review. Significantly, Benn said aftewards that he agreed with every word Dromey had said. Corbyn's office has previously said that it is up to the NEC, not the leader, whether the former London mayor holds the position. In reference to 7 July, an aide repeated Corbyn's statement that he preferred to "remember the brilliant words Ken used after 7/7". 

As on previous occasions, MPs complained that the leader failed to answer the questions that were put to him. A shadow minister told me that he "dodged" one on whether he believed the UK should end air strikes against Isis in Iraq. In reference to Syria, a Corbyn aide said afterwards that "There was significant support for the leader. There was a wide debate, with people speaking on both sides of the arguments." After David Cameron's decision to call a vote on air strikes for Wednesday, leaving only a day for debate, the number of Labour MPs backing intervention is likely to fall. One shadow minister told me that as few as 40-50 may back the government, though most expect the total to be closer to the original figure of 99. 

At the end of another remarkable day in Labour's history, a Corbyn aide concluded: "It was always going to be a bumpy ride when you have a leader who was elected by a large number outside parliament but whose support in the PLP is quite limited. There are a small number who find it hard to come to terms with that result."

George Eaton is political editor of the New Statesman.