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.

Photo: Getty
Show Hide image

Britain's largest communications union to affiliate to Momentum

The CWU, one of Corbyn's earliest backers, will formally affliate to the organisation.

One of Labour’s largest trade unions is set to affiliate to Momentum after the ruling executive of the Communications Workers Union voted unanimously to join the organisation.

The CWU, Britain’s largest communications union and the fifth largest affiliate to Labour, was one of the earliest backers of Jeremy Corbyn. 

Dave Ward, the union’s general secretary, told the New Statesman that “the general election showed the value of Momentum as part of the wider labour movement”, and that the body, which emerged out of Jeremy Corbyn’s 2015 leadership campaign, was now “a major political force in the UK”, saying it had a  “key role to play in securing a transformative Labour government”.

The NEC’s vote will now go to a ratifying vote by the CWU’s annual conference. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.