Osborne's deficit keeps growing

Despite the return of growth and no shortage of austerity, the deficit was £1.3bn higher in July than at the same point last year.

Despite the recent run of positive economic data, today's borrowing figures show that the coalition's deficit reduction plan remains off track. Borrowing in July (excluding financial interventions and the QE coupons from the Bank of England) was £0.5bn, £1.3bn higher than in the same month last year when it stood at £-0.8bn, and higher than the market forecast of a £2.5bn. So far this financial year, the deficit is £36.8bn compared to £35.2bn at this stage last year. 

The Treasury has responded by pointing out that government spending was higher than usual due to local government accounting changes and timing changes for some departments, and that underlying tax receipts are by up 3.4%. But even taking this into account, the figures remain poor. After all, there has been no shortage of austerity. Infrastructure spending has fallen by 42 per cent, VAT has risen to 20% and 423,000 government jobs have been cut, so that the public-sector workforce is at its lowest level as a share of employment since 1999. Despite all this, progress on deficit reduction has stalled. 

As for the national debt, which Cameron falsely claimed the government was "paying down", it's now passed the £1.2trn mark (75% of GDP), the highest level since the late 1960s. 

 

George Osborne plays with Titas during a visit to a nursery in Hammersmith on August 5, 2013 in London. 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.