David Cameron speaks to invited World War II veterans aboard HMS Belfast in central London, on May 20, 2014. Photograph: Getty Images.
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Bad news for the Tories as net migration and the deficit rise

Targets are missed on two fronts, with net migration up by 212,000 and borrowing up by £1.9bn. 

The Conservatives are in better spirits than almost anyone expected them to be on election day. Weeks of careful expectation management have ensured that a third-place finish in the Europeans has been priced into David Cameron's political share price, with potential rebels appeased in advance, while the narrowing of the national polls has reassured Conservative MPs that they can win the next general election. 

But the day has not started well for the Tories, with new figures showing that they're off course on two key targets. The ONS estimates that net migration rose by 212,000 last year, up from 177,000 in 2012 and far above the "tens of thousands" Cameron is aiming for. 

In addition, the deficit stood at £11.5bn last month, a year-on-year increase of £1.9bn. With borrowing still rising, despite the return of growth, there is no prospect of George Osborne meeting his pledge to reduce the national debt as a share of GDP by 2015-16 and to eliminate the structural deficit by the end of this parliament. 

But while the figures represent an unarguable policy failure for the Tories, the political question is whether Labour can capitalise. As long as voters continue to doubt that the opposition would be any better at reducing immigration and the deficit, Miliband will struggle to reap any benefits. 

George Eaton is political editor of the New Statesman.

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Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.