Another Cameron myth: the coalition hasn't reduced the deficit by "a quarter"

The most recent figures show that current borrowing has fallen by just 6.4 per cent since 2010, while net borrowing has fallen by 18.3 per cent.

David Cameron was caught out last week when he falsely claimed in a Conservative Party political broadcast that the coalition was "paying down Britain's debts" (the national debt has risen from £811.3bn to £1.11trn since he entered office). But what of his even more frequent boast to have reduced the deficit by "a quarter"? The Conservatives' website states

Dealing with our debts means we have had to take tough decisions. But we are making progress: in the two years since we came to office, we’ve already cleared one quarter of the deficit left by Labour.

The Tories' claim is based on the fact that public sector net borrowing fell from £159bn in 2009/10 to £121.6bn in 2011/12, a reduction of 24 per cent.  But since the net borrowing figure includes investment spending, which even Nick Clegg now concedes was cut too fast (capital spending fell from £48.5bn in 09/10 to £28bn in 11/12, a 42.3 per cent reduction), a better test of the coalition's fiscal rectitude is current borrowing, which reflects the difference between revenue and day-to-day (non-investment) spending. On this measure, borrowing has fallen from £110.5bn in 09/10 to £93.6bn in 11/12, a notably smaller reduction of 15.3 per cent. The shortfall in revenues caused by the near-absence of growth since the Spending Review in 2010 and the higher welfare bills caused by the rise in long-term unemployment have left Osborne unable to meet his deficit targets.

The coalition's boast to have reduced borrowing by a quarter also depends on ignoring all the figures since April 2012, when the last financial year (11/12) ended. If we take into account the figures since then (see table PSF1 on p.36) , the picture is even worse. Over the last 12 months (January 2012-December 2012), the government's net borrowing stands at £128.9bn (excluding the one-off transfer of Royal Mail pension assets to the public sector), an increase of 5.8 per cent since 2011, when borrowing was £121.4bn, and a fall of only 18.3 per cent since 09/10. As for current borrowing, that stands at £103.4bn over the last year, a reduction of just 6.4 per cent since 09/10 (when current borrowing was £110.5bn). 

So, to summarise, the coalition reduced net borrowing by 24 per cent between 09/10 and 11/12 but only by slashing infrastructure spending by 42 per cent and tipping the UK into a double-dip recession and, perhaps, a triple-dip. Current borrowing has fallen by a smaller 15.3 per cent over that period. 

If, unlike Cameron, we take into account the borrowing figures since April 2012 , net borrowing has fallen by 18.3 per cent since 09/10, while current borrowing has fallen by just 6.4 per cent.

For a government whose raison d'etre is deficit reduction ("The deficit reduction programme takes precedence over any of the other measures in this agreement," states the Coalition Agreement), the coalition really isn't very good at it. 

David Cameron addresses a session of the annual World Economic Forum (WEF) meeting in the Swiss resort of Davos. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Commons Confidential: Herod in the House

Your weekly dose of gossip from around Westminster.

The spell cast over Theresa May by the youthful Gavin Williamson and Cronus, his pet tarantula, leaves envious Tory rivals accusing him of plotting to succeed the Stand-In Prime Minister. The wily Chief Whip is eyed suspiciously as a baby-faced assassin waiting to pounce.

My tearoom snout whispers that May is more dependent on the fresh-faced schemer (he also served as David Cameron’s PPS) who signed a survival deal bunging the DUP £1bn protection money than she is on David Davis, Philip Hammond, Amber Rudd or Boris Johnson. She delegated the reshuffle’s middle and lower ranks to Williamson, but his nous is questioned after he appointed Pudsey’s Stuart Andrew (majority: 331) and Calder Valley’s Craig Whittaker (609) as henchmen. Vulnerable seats are dangerously unprotected when whips don’t speak in the House of Commons.

Left-wing Labour MPs mutter that Jeremy Corbyn is implementing a “King Herod strategy” to prevent the birth of rival messiahs. A former shadow cabinet member insisted that any display of ambition would be fatal. The punishment snubbings of Yvette Cooper and Chuka Umunna, who had expressed a willingness to serve, were intended to intimidate others into obedience. The assertion was reinforced by an influential apparatchik musing: “John [McDonnell] is looking for a bag carrier, so Chuka could apply for that.” The election has laced the boot tightly on the left foot.

The military career of Barnsley’s Major Dan Jarvis included service in Northern Ireland. Perhaps old acquaintances will be renewed with the allocation to Sinn Fein’s seven MPs of a meeting room next to the Labour squaddie’s office.

Ian Lavery, the burly ex-miner appointed as Labour’s new chair by Jeremy Corbyn, disclosed that he was bombarded with messages urging him to “nut” – that is, headbutt – Boris Johnson when he faced down the Foreign Secretary on TV during the election. I suspect that even Trembling BoJo’s money would be on the Ashington lad in a class war with the Old Etonian.

Campaign tales continue to be swapped. Labour’s victorious Sharon Hodgson helped a family put up a tent. The defeated Lib Dem Sarah Olney was heckled through a letter box by a senior Labour adviser’s five-year-old son: “What’s that silly woman saying? Vote Labour!” Oddest of all was the Tory minister James Wharton informing his opponent Paul Williams that he’d put in a good word for him with Labour HQ. There was no need – Williams won.

The Tory injustice minister Dominic Raab is advertising for an unpaid Westminster “volunteer”, covering only “commuting expenses”. Does he expect them to eat at food banks?

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 29 June 2017 issue of the New Statesman, The Brexit plague

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