Blow for Osborne as the deficit rises again

Borrowing so far this year is 10 per cent higher than in 2011.

Thanks to some dubious accounting, George Osborne was able to boast in his Autumn Statement that the deficit would be lower this year than last. But the actual figures (as opposed to the OBR's forecasts) show that it's still rising. Today's release from the Office for National Statistics reveals that borrowing was £17.5bn last month, £1.2bn higher than in November 2011. The deficit for the year to date is now £92.7bn, £8.3bn (9.9 per cent) higher than in the same period the previous year.

It was the anticipated £3.5bn windfall from the 4G spectrum auction that allowed Osborne to claim that the deficit would continue to fall in annual terms (it is 22.3 per cent lower than in 2009-10). Without that, the OBR's forecasts suggest that borrowing is set to come in at £123.8bn, £2.4bn higher than in 2011-12. So it's notable that the ONS release says that it "has yet to classify how the proceeds of the auction (or the initial deposits) should be treated under National Accounts rules and so how they will impact on the statistical measures in this bulletin." Should the ONS decide for any reason that the 4G receipts can't be counted toward deficit reduction, Osborne will be in trouble.

There was also bad news on growth as Q3 GDP was downgraded from 1 per cent to 0.9 per cent. This revision is statistically insignificant (the figures are constantly revised upwards and downwards) but it could be a prelude of worse things to come. There is a strong chance that the Q4 figures, which are released on 25 January, will show that the economy is shrinking again. The OBR has forecast a contraction of -0.1 per cent. Before the last growth figures were released, David Cameron memorably declared that "the good news will keep coming". He may soon have cause to reject those words.

Chancellor George Osborne leaves Number 11 Downing Street. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Voters are turning against Brexit but the Lib Dems aren't benefiting

Labour's pro-Brexit stance is not preventing it from winning the support of Remainers. Will that change?

More than a year after the UK voted for Brexit, there has been little sign of buyer's remorse. The public, including around a third of Remainers, are largely of the view that the government should "get on with it".

But as real wages are squeezed (owing to the Brexit-linked inflationary spike) there are tentative signs that the mood is changing. In the event of a second referendum, an Opinium/Observer poll found, 47 per cent would vote Remain, compared to 44 per cent for Leave. Support for a repeat vote is also increasing. Forty one per cent of the public now favour a second referendum (with 48 per cent opposed), compared to 33 per cent last December. 

The Liberal Democrats have made halting Brexit their raison d'être. But as public opinion turns, there is no sign they are benefiting. Since the election, Vince Cable's party has yet to exceed single figures in the polls, scoring a lowly 6 per cent in the Opinium survey (down from 7.4 per cent at the election). 

What accounts for this disparity? After their near-extinction in 2015, the Lib Dems remain either toxic or irrelevant to many voters. Labour, by contrast, despite its pro-Brexit stance, has hoovered up Remainers (55 per cent back Jeremy Corbyn's party). 

In some cases, this reflects voters' other priorities. Remainers are prepared to support Labour on account of the party's stances on austerity, housing and education. Corbyn, meanwhile, is a eurosceptic whose internationalism and pro-migration reputation endear him to EU supporters. Other Remainers rewarded Labour MPs who voted against Article 50, rebelling against the leadership's stance. 

But the trend also partly reflects ignorance. By saying little on the subject of Brexit, Corbyn and Labour allowed Remainers to assume the best. Though there is little evidence that voters will abandon Corbyn over his EU stance, the potential exists.

For this reason, the proposal of a new party will continue to recur. By challenging Labour over Brexit, without the toxicity of Lib Dems, it would sharpen the choice before voters. Though it would not win an election, a new party could force Corbyn to soften his stance on Brexit or to offer a second referendum (mirroring Ukip's effect on the Conservatives).

The greatest problem for the project is that it lacks support where it counts: among MPs. For reasons of tribalism and strategy, there is no emergent "Gang of Four" ready to helm a new party. In the absence of a new convulsion, the UK may turn against Brexit without the anti-Brexiteers benefiting. 

George Eaton is political editor of the New Statesman.