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.

Getty
Show Hide image

Lord Empey: Northern Ireland likely to be without government for a year

The former UUP leader says Gerry Adams is now in "complete control" of Sinn Fein and no longer wants to be "trapped" by the Good Friday Agreement

The death of Martin McGuinness has made a devolution settlement in Northern Ireland even more unlikely and has left Gerry Adams in "complete control" of Sinn Fein, the former Ulster Unionist leader Reg Empey has said.

In a wide-ranging interview with the New Statesman on the day of McGuinness’ death, the UUP peer claimed his absence would leave a vacuum that would allow Adams, the Sinn Fein president, to consolidate his hold over the party and dictate the trajectory of the crucial negotiations to come. Sinn Fein have since pulled out of power-sharing talks, leaving Northern Ireland facing the prospect of direct rule from Westminster or a third election in the space of a year. 

Empey, who led the UUP between and 2005 and 2010 and was briefly acting first minister in 2001, went on to suggest that, “as things stand”, Northern Ireland is unlikely to see a return to fully devolved government before the inquiry into the Renewable Heat Incentive scheme is complete -  a process which could take up to a year to complete.

“Adams is now in complete control of Sinn Fein,” he said, adding that it remained unclear whether McGuinness’ successor Michelle O’Neill would be “allowed to plough an independent furrow”. “He has no equal within the organisation. He is in total command of Sinn Fein, and that is the way it is. I think he’s even more powerful today than he was before Martin died – by virtue of there just being nobody there.”

Asked what impact the passing of McGuinness, the former deputy first minister and leader of Sinn Fein in the north, would have on the chances of a devolution settlement, Empey, a member of the UUP’s Good Friday Agreement negotiating delegation, said: “I don’t think it’ll be positive – because, for all his faults, Martin was committed to making the institutions work. I don’t think Gerry Adams is as committed.

Empey added that he believed Adams did not want to work within the constitutional framework of the Good Friday Agreement. In a rebuke to nationalist claims that neither Northern Ireland secretary James Brokenshire nor Theresa May can act as honest or neutral brokers in power-sharing negotiations given their reliance on the DUP’s eight MPs, he said: “They’re not neutral. And they’re not supposed to be neutral.

“I don’t expect a prime minister or a secretary of state to be neutral. Brokenshire isn’t sitting wearing a hat with ostrich feathers – he’s not a governor, he’s a party politician who believes in the union. The language Sinn Fein uses makes it sound like they’re running a UN mandate... Gerry can go and shout at the British government all he likes. He doesn’t want to be trapped in the constitutional framework of the Belfast Agreement. He wants to move the debate outside those parameters, and he sees Brexit as a chance to mobilise opinion in the republic, and to be seen standing up for Irish interests.”

Empey went on to suggest that Adams, who he suggested exerted a “disruptive” influence on power-sharing talks, “might very well say” Sinn Fein were “’[taking a hard line] for Martin’s memory’” and added that he had been “hypocritical” in his approach.

“He’ll use all of that,” he said. “Republicans have always used people’s deaths to move the cause forward. The hunger strikers are the obvious example. They were effectively sacrificed to build up the base and energise people. But he still has to come to terms with the rest of us.”

Empey’s frank assessment of Sinn Fein’s likely approach to negotiations will cast yet more doubt on the prospect that devolved government might be salvaged before Monday’s deadline. Though he admitted Adams had demanded nothing unionists “should die in a ditch for”, he suggested neither party was likely to cede ground. “If Sinn Fein were to back down they would get hammered,” he said. “If Foster backs down the DUP would get hammered. So I think we’ve got ourselves a catch 22: they’ve both painted themselves into their respective corners.”

In addition, Empey accused DUP leader Arlene Foster of squandering the “dream scenario” unionist parties won at last year’s assembly election with a “disastrous” campaign, but added he did not believe she would resign despite repeated Sinn Fein demands for her to do so.

 “It’s very difficult to see how she’s turned that from being at the top of Mount Everest to being under five miles of water – because that’s where she is,” he said. “She no longer controls the institutions. Martin McGuinness effectively wrote her resignation letter for her. And it’s very difficult to see a way forward. The idea that she could stand down as first minister candidate and stay on as party leader is one option. But she could’ve done that for a few weeks before Christmas and we wouldn’t be here! She’s basically taken unionism from the top to the bottom – in less than a year”.

Though Foster has expressed regret over the tone of the DUP’s much-criticised election campaign and has been widely praised for her decision to attend Martin McGuinness’ funeral yesterday, she remains unlikely to step down, despite coded invitations for her to do so from several members of her own party.

The historically poor result for unionism she oversaw has led to calls from leading loyalists for the DUP and UUP – who lost 10 and eight seats respectively – to pursue a merger or electoral alliance, which Empey dismissed outright.

“The idea that you can weld all unionists together into a solid mass under a single leadership – I would struggle to see how that would actually work in practice. Can you cooperate at a certain level? I don’t doubt that that’s possible, especially with seats here. Trying to amalgamate everybody? I remain to be convinced that that should be the case.”

Accusing the DUP of having “led unionism into a valley”, and of “lashing out”, he added: “They’ll never absorb all of our votes. They can try as hard as they like, but they’d end up with fewer than they have now.”

Patrick Maguire writes about politics and is the 2016 winner of the Anthony Howard Award.