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.

Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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