Osborne's deficit continues to grow

Despite no shortage of austerity, borrowing was £1.3bn higher in April than in the same month last year.

As George Osborne awaits the verdict of the IMF on his great austerity experiment at 12pm, the latest borrowing figures are being written up as a positive for the Chancellor. The deficit for April came in at £6.3bn, around £2bn lower than expected, and public sector net borrowing for the previous year (2012/13) was revised down from £120.6bn to £119.5bn (compared to a deficit of £120.9bn in 2011/12).

But dig deeper into the data, and the picture isn't so positive for Osborne. Once the effects of the transfer of the Royal Mail Pension Plan and the QE coupons from the Bank of England are stripped out, the deficit stood at £10.2bn last month, £1.3bn higher than the previous year. As last month's dramatic welfare cuts showed, there's been no shortage of austerity. But the government is still borrowing more than in 2012. As for the national debt, which David Cameron falsely claimed the coalition was "paying down", that now stands at £1.2trn, or 75.2 per cent of GDP. 

George Osborne delivers a speech at media company Unruly, on April 25, 2013 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Gang of Four’s David Owen says Labour should “proudly and coherently” work with the SNP

The former Labour politician and SDP co-founder tells his old party to “face up to reality” and agree to ally with the SNP.

We don’t have an effective opposition. The question is how to make it effective. I think they should start to discuss with a view to deciding at a conference this summer on its policies. It’s just got to stop for a moment, have a pause on personalities. They’re going to have to return to personalities, they have to have a new leader. But at the moment, the issue should be: let’s get the policies right. I’m sure there are areas in which people want to see changes, but they’re obviously completely incoherent over Europe, so just let that incoherence lie.

If Labour party MPs can’t start to talk about why young people were attracted to Jeremy Corbyn, they won't find the solution. Corbyn – you can trash him like the right-wing press do every day, but they've always done that with every form of Labour leader we've ever had. I’m not defending Corbyn, I don’t think he is the right person to be leader of the Labour party and become Prime Minister.

They've got to widen their base, and they've got to widen it in an election. That doesn't stop the party having more values. The Labour party instinctively, like the country, needs to move a bit more to the left. I'm not afraid of talking more about socialism and social values. I think that would be matching the mood of the country.

Clement Attlee and the Labour party came in in 1945, and shocked everybody, including all the pundits and newspapers – they responded to a mood in the country that wanted a difference. I believe there is a mood in the country that wants a difference. They don’t want recycled Blairism.

You’ve just got to face up to reality. The fundamental thing is, where we slipped up in [the last] election, is that we were not able to answer the question – when they were ravaged and savaged about the SNP – Ed Miliband should've lost his cool. All he said during the attack about working with the SNP was that it ain't going to happen. Well, it obviously was going to happen.

What they needed to say is proudly and completely coherently: if the electorate send a Parliament back which has the SNP in substantial numbers, it is perfectly legitimate for the Labour party to work with them. Health policy – a pretty good step would be to take what’s happening in Scotland and more or less mirror it.

That is the nature of the beast, which is democracy. Even without changing the system of voting, we now have multi-parties, whether we like it or not. We were told the route through was not to create a Social Democratic Party alongside the Liberals, you had to merge with them and that there was no room for more than three political parties in Britain. Well, it’s absolute nonsense. We now have seven, you could argue. We have to live with that reality. You have to be ready to talk to them. You won’t agree with them on separation but you can agree on many other areas, or you certainly should be trying.

I think it’s asking a hell of a lot to be leader of a party, asking to be Prime Minister, when you've never performed yourself in government, you've never held a serious job anywhere else. It's a very, very big thing. He didn't want to be leader of the party, he didn't expect to be leader of the party, he stood on the basis that he was the person they all turned to on the left, and he did it, and he surprised us all. The fact that he won should be a serious message to us. The reason he won is because everybody was totally sick and fed up with the other people. We've got to face up to the fact that this has happened now twice. Is the Labour party going to go on churning out a sort of mollified form of Blairism?

David Owen is an independent social democratic peer and co-founder of the SDP.

As told to Anoosh Chakelian.

Lord Owen was Foreign Secretary 1977-79, a founder-member of the SDP and is now a crossbench peer.

This article first appeared in the 30 March 2017 issue of the New Statesman, Wanted: an opposition