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.

Photo: Getty Images
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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.