Support 100 years of independent journalism.

  1. Business
  2. Economics
26 June 2012

Osborne’s failure on the deficit becomes clearer

Borrowing is £2.7bn higher than a year ago.

By George Eaton

According to David Cameron, deficit reduction is the “guiding task” of the coalition, so it’s unfortunate that he’s not very good at it. The latest figures from the ONS show that his government borrowed £17.9bn in May, £2.7bn more than a year ago. Worse, the total deficit for 2011-12 has been revised up by £3.2bn to £127.6bn, and the national debt is now £1.0134 trillion (65% of GDP), a stat that will terrify the fiscal conservatives in Osborne’s party.

In his “emergency Budget” in 2010, Osborne claimed that “unless we deal with our debts there will be no growth”. But as all Keynesians know, the reverse is true. Unless you stimulate growth, you can’t deal with your debts. With the economy back in recession, income tax receipts are down 7 per cent on May 2011.

The Chancellor once hoped to go to the election boasting that he had “balanced the books” and cleaned up “the mess” left by Labour. Now, with 2015 borrowing likely to exceed even the OBR’s recent forecast of £75bn (4.3 per cent), the question voters will ask is “what was all the pain for?”

Select and enter your email address Quick and essential guide to domestic and global politics from the New Statesman's politics team. A weekly newsletter helping you fit together the pieces of the global economic slowdown. The New Statesman’s global affairs newsletter, every Monday and Friday. The best of the New Statesman, delivered to your inbox every weekday morning. The New Statesman’s weekly environment email on the politics, business and culture of the climate and nature crises - in your inbox every Thursday. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A newsletter showcasing the finest writing from the ideas section and the NS archive, covering political ideas, philosophy, criticism and intellectual history - sent every Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
I consent to New Statesman Media Group collecting my details provided via this form in accordance with the Privacy Policy

Content from our partners
Why ports are the gateway to growth
We are living longer than our predecessors – policy must catch up
Getting Britain building