Government borrowing is up by 10 per cent; Treasury says deficit reduction plan “is working”

zcoalitionfaildeficit

If you’re boggling at the headline, rest assured it is correct!

Let’s run down the figures. According to the Office for National Statistics (ONS), government borrowing (excluding the public sector banks) was £11.8 billion last month, an increase of £1.6 billion, or around 10 per cent, compared with September 2013.

Public sector net debt (again excluding those banks) was £1.4513 trillion – 79.9 per cent of GDP. This was an increase of £100.7 billion compared with September 2013, meaning the national deficit for the year to September 2014 was the same amount.

George Osborne’s target for the financial year 2014-15 is to reduce borrowing to £95.5 billion. With tax receipts going down – by £1bn in the six months since the start of the financial year, against Treasury predictions that they would rise (because we’ve all got jobs, right?) – this seems less and less likely.

According to The Guardian, a Treasury spokesman responded to the figures by saying the “government’s long-term economic plan is working”.

Really?

The trouble is, the Coalition Agreement states that “We [Conservatives and Liberal Democrats] recognise that deficit reduction, and continuing to ensure economic recovery, is the most urgent issue facing Britain”.

The deficit is increasing, not reducing, yet George Osborne says his plan is working.

Perhaps he has been lying to us all along.

Perhaps he has a different plan.

 

8 thoughts on “Government borrowing is up by 10 per cent; Treasury says deficit reduction plan “is working”

  1. aturtle05

    Somewhere in history, there may be a point where a deficit getting worse was considered an improvement. This may be how Gideon gets his headline.

    The Chancellor of the Exchequer is a history student, not an accountant. He will never be able to balance the books, not while he insists on cutting taxes across the board. It’s simple economics, if you have a certain amount coming in, you don’t cut your income to reduce your expenditure!

    1. hstorm

      In fact, it could well be argued that the deficit going up is not necessarily bad news – although that depends whether it is because of more investment or because of loss of revenue; in the final analysis, the deficit is simply the ‘slack’ in the private sector that is picked up by the public sector to make sure that enough goods are ‘consumed’ to avoid major losses.

      The problem with this remark from Gideon is more that he is claiming that up is down. He talks about a deficit-reduction plan (whether that is good or bad) “working” while the deficit is going up.

  2. Chris Kitcher

    ……….a Treasury spokesman responded to the figures by saying the “government’s long-term economic plan is working”.

    To me this is the most worrying sentence in this article. What trust can we have even in a supposedly impartial civil service when silly statements like this are made?

  3. jaypot2012

    If the deficit is growing and we have had all this austerity for the last 4+ years – then where have the savings from the austerity gone?
    A. To the rich!
    It’s about time people started asking where all OUR money has gone and getting it back. But they won’t…
    As for Gidiot – words fail me.

  4. Mike Sivier Post author

    From Colin Glazebrook (@Boromoor) on Twitter: “Think I might be on the George Osborne diet plan. Started it a year ago and now half a stone heavier.”

  5. hstorm

    I wouldn’t even label this one ‘doublethink’, it’s just outright denial of the plain facts. Worse than IDS.

    On a side note, it’s not necessarily a bad thing if the deficit does go up, but for better or worse, wiping out by the end of this parliament was an explicit goal at the outset, so for Gideon to claim his plan is ‘working’ shows an almost religious zeal. Truly frightening how divorced this Government is from physical reality.

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