Osborne faces failure on the deficit after 4G auction falls short

Ed Balls set for revenge after 4G auction raises £1.16bn less than expected.

George Osborne wrongfooted Ed Balls at last year's Autumn Statement when he announced that, contrary to expectations, the deficit was forecast to fall, not rise this year. The shadow chancellor was jeered by Osborne and Cameron as he repeatedly stumbled over his pre-prepared attack lines, prompting Osborne to declare: "That was the worst reply to an Autumn Statement that I have ever heard in this house. He said one thing that was true, he said it right at the beginning. He said the deficit wasn't rising. It was a Freudian slip."

As Balls later explained: "The outside forecasters were all expecting a rise in borrowing this year, because it has risen for the first seven months ... it was impossible to work out in that first minute or two what was going on."

It was only after Balls had replied that Osborne's creative accounting emerged. In a trick worthy of Enron, the Chancellor had banked the expected £3.5bn receipts from the 4G mobile spectrum auction - even though it had yet to take place. Had he not done so, the Office for Budget Responsibility would have forecast a deficit for this year of £123.8bn, £2.4bn higher than in 2012. 

But the Chancellor's trickery has now backfired. As Alex reports, the 4G auction raised £2.34bn - £1.16bn less than expected. As a result, when he delivers the Budget on 20 March, Osborne will almost certainly be forced to announce that the deficit will be higher this year than last. Borrowing so far this financial year is £7.2bn (7.3 per cent) higher than at the same point last year, leaving Osborne £4.86bn short after the inclusion of the 4G receipts. Somewhere in Yorkshire, Keynes's rottweiler is already planning his revenge. 

Chancellor of the Exchequer George Osborne attends a press conference at the Treasury in Whitehall on February 6, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Andy Burnham quits shadow cabinet: "Let's end divisive talk of deselections"

The shadow home secretary reflected on a "profoundly sad" year. 

Andy Burnham will leave the shadow cabinet in the reshuffle to focus on his bid to become Manchester's metro mayor in 2017. 

In his swansong as shadow home secretary, Burnham said serving Labour had been a privilege but certain moments over the last 12 months had made him "profoundly sad".

He said:

"This is my tenth Conference speaking to you as a Cabinet or shadow cabinet minister.

"And it will be my last.

"It is time for me to turn my full focus to Greater Manchester. 

"That's why I can tell you all first today that I have asked Jeremy to plan a new shadow cabinet without me, although I will of course stay until it is in place."

Burnham devoted a large part of his speech to reflecting on the Hillsborough campaign, in which he played a major part, and the more recent campaign to find out the truth of the clash between police and miners at Orgreave in 1984.

He defended his record in the party, saying he had not inconsistent, but loyal to each Labour leader in turn. 

Burnham ran in the 2015 Labour leadership election as a soft left candidate, but found himself outflanked by Jeremy Corbyn on the left. 

He was one of the few shadow cabinet ministers not to resign in the wake of Brexit.

Burnham spoke of his sadness over the turbulent last year: He was, he said:

"Sad to hear the achievements of our Labour Government, in which I was proud to serve, being dismissed as if they were nothing.

"Sad that old friendships have been strained; 

"Sad that some seem to prefer fighting each other than the Tories."

He called for Labour to unite and end "divisive talk about deselections" while respecting the democratic will of members.

On the controversial debate of Brexit, and controls on immigration, he criticised Theresa May for her uncompromising stance, and he described Britain during the refugee crisis as appearing to be "wrapped up in its own selfish little world".

But he added that voters do not want the status quo:

"Labour voters in constituencies like mine are not narrow-minded, nor xenophobic, as some would say. 

"They are warm and giving. Their parents and grandparents welcomed thousands of Ukrainians and Poles to Leigh after the Second World War.

"And today they continue to welcome refugees from all over the world. They have no problem with people coming here to work.

"But they do have a problem with people taking them for granted and with unlimited, unfunded, unskilled migration which damages their own living standards. 

"And they have an even bigger problem with an out-of-touch elite who don't seem to care about it."

Burnham has summed up Labour's immigration dilemma with more nuance and sensitivity than many of his colleagues. But perhaps it is easier to do so when you're leaving your job.