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Government borrowing is up – the economic picture isn’t as rosy as the Tories say

20 June 2014

20 June 2014

It’s tempting given the optimistic mood on the Conservative benches at the moment to think that everything is just great with the economy. Not so, according to today’s borrowing figures from the ONS, which show that government borrowing was higher than expected: George Osborne borrowed £13.3bn in May, up £0.7bn from the same month last year, and much higher than the £9.35bn forecast. Tax receipts have been weaker than expected, which has contributed to higher net borrowing.

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Labour is saying that Osborne is now set to break his promise to balance the books by next year, while also arguing that it will balance the books but ‘in a fairer way’. The party still has a lot of detail to fill in on how on earth it would achieve this. The Treasury’s response is that ‘the job is not yet done which is why we must continue to work through the plan that is building a resilient economy’.

But Samuel Tombs from Capital Economics fears that the discrepancy between the economic recovery and the borrowing figures ‘contain tentative signs that the coalition may be beginning to struggle to bring down the deficit in line with the fiscal plans’.

The figures are a reminder that whoever wins in 2015, they’re still going to have a rough time and a big challenge ahead of them, no matter how cheery most of the statistical releases make the Tories at the moment.

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  • LB

    Labour is saying that Osborne is now set to break his promise to balance the books by next year,


    Would be nice if the books weren’t cooked.

    Use FRS17 and include the pensions. Otherwise they are a work of fiction facilitating a fraud.

  • HookesLaw

    As The Times reports – but it seems beyond the ability of the Spectator – ‘The May figures were slightly distorted by receipt of payments from a
    Swiss tax deal. Stripping out the Swiss tax deal, the ONS said that May
    borrowing was 1.5 per cent lower than the previous year.’
    This may be still higher than ‘expectations’ but who trusts any economists expectations.

  • RavenRandom

    …Or it could be just one month’s numbers.

  • Fraser Bailey

    Well of course borrowing is up. There are still millions on the state payroll doing nothing useful whatsoever. All paid quite staggering amounts of money (not to mention the pensions etc) for their useless and destructive activities.

    The only solution is to massively cut back the size of the state, as we have all known for decades. This need not, necessarily, lead to rioting in the streets. All things being equal, there have been no serious riots in Greece, Portugal and Spain.

  • FrankCTapp

    fears that the discrepancy between the economic recovery and the borrowing figures ‘contain tentative signs that the coalition may be beginning to struggle to bring down the deficit in line with the fiscal plans’.

  • the viceroy’s gin

    Uh oh.

    And wait ’til interest rates start rising, as they will shortly.

    • dado_trunking

      is that what the voices are telling you in your head, lad?

      • the viceroy’s gin

        …is that what your army of sockpuppets are telling you to ask, lad?

        • dado_trunking

          Listen, pleb – you must not borrow more now that your bedsit is worth another ten grand. Be afraid!
          The dukes in and around Westminster however know how to play the market which they created for their own benefit.

          • the viceroy’s gin

            …can any other of you socialist nutters translate this nutter’s gibberish?

            • dado_trunking

              Listen, pleb. Just don’t borrow any more money, m’kay?
              The do nothing salesman at the Bank of Engerland says so.

              • the viceroy’s gin

                …and give a translate to this blithering gibberish too, while you’re at it.

                • dado_trunking

                  Listen up, pleb. You want two borro more big ones, think abowt dat twice, pleb. Your bankmanagerer at the bank of Engererland ffinks you shouldn’t.

                • the viceroy’s gin

                  …and this one, well, I don’t know where to start. This gibberish may have to be consigned to the recycling.

    • berosos_bubos

      They won’t because of deflation in the EU and the US unwinding it’s Q.E.

    • Chris Morriss

      If only. I’ll believe that interest rates will start rising (as they desperately need to) when I see it!

  • GraveDave

    Let’s hope the Tories win if only so they and their Spectator reading deadheads can stop spouting the mantra about the ‘The mess New Labour left us in’. And before anyone calls me a leftie or socialist moron, I got just as bored hearing the same thing throughout New Labour’s rule, when things weren’t quite going to plan.
    As it is, the collapse will inevitably come – whoever’s in charge .

  • Colin56

    What a ‘Westminster bubble’ post this is. Anyone living in the real world (i.e. not SW1) will know what a terrible mess the economy is in, and what a complete balls the two posh boys are making of it. Add in the carrot-haired Lib Dem twit and you really have a nightmare team. There’s no money around (people are spending on cards – money that doesn’t really exist), wages and salaries are down in real terms, inflation is rife and jobs are very hard to come by. However that all plays fine on the poshos’ hymn sheet because it doesn’t affect them one little bit, as (a) they are all paid from taxpayers’ money; and (b) they all live off their trust funds anyway, and would’t know what worrying about the mortgage actually means.
    So – the ‘news’ that government borrowing is up is hardly a surprise. No-one believes the stats any more, they’re just made up to keep the plebs quiet. In ten month’s time I reckon the Chief Secretary will be leaving the next administration the same message as before – ‘there’s no money left’. And so it goes on …

    • berosos_bubos

      Job opportunities are at a 43 year high.

      • Colin56

        Lies, damned lies and statistics. Zero hours contracts, McJobs and the rest. Not sure what you’re smoking but it isn’t working!

    • HookesLaw

      Terrible mess outside London. Land Rover just announced a further £200 million investment on Merseyside. This on top of previous £500 million. Plant working 24 hours a day.
      JLR has also invested £500 million in a new engine plant in Wolverhampton.
      Then there is the £800 million investment in the Airport City for Manchester.

      • Colin56

        They’re making Chelsea tractors for export or sale to trustafarians. Good on them for taking money off people who don’t know any better. But in Swindon, Honda – which makes car real people buy – are laying workers off and cutting shifts. the posh boys’ government is busy creating a country bitterly divided against itself. And they cook the books just as much as Bliar, Brown & co ever did.

      • Colonel Mustard

        That would be the Indian Tata Motors-owned Land Rover. You should ask yourself why most of this “investment” comes from foreign owned companies and how they benefit.

  • swatnan

    The Tories have been caught massaging the figures again.
    The did it with Invalidity benefit and housing and employment.
    Its impossible to come out of the mother of all recessions in just 4 years, just like its virtually impossible for an Opposition to come back in 5 years, unless the Govt is completley and utterly incompetant, because it takes at least ten years to get the economy back on an even keel and for the electorate to forget..

    • berosos_bubos

      It wasn’t a recession. A large part of the economy was closed down for good.

    • LB


      So how much did Labour leave off the books for pension debts?

      Ah yes, if Labour fiddle the figures is good.

      Labour – spending your pension money on 5 a day coordinators.

  • Alex

    There was an advert on the radio this morning for ultra low emission vehicles, essentially promoting the ‘Office for Low Emission Vehicles’, which appears to be a government body that is spraying a billion pounds of taxpayers money at promoting electric cars.
    Even if you believe that Climate Change is a problem then electric cars aren’t the answer. Even if they were an answer this is a ludicrous waste of money.
    As long as stuff like this goes on then I simply do not accept that the government cannot balance the books; it is simply a lower priority than blowing our money on politician’s self-aggrandisement.

    • Colonel Mustard

      “The Office for Low Emission Vehicles (OLEV) is a team working across government to support the early market for ultra-low emission vehicles (ULEV). We are providing over £900 million to position the UK at the global forefront of ULEV development, manufacture and use. This will contribute to economic growth and will help reduce greenhouse gas emissions and air pollution on our roads.”


      • Alex

        Makes me wonder … if spending £900 million on this contributes to economic growth why not spend £90 billion and have 100 times the economic growth?
        The broken window fallacy in action.

      • Colin56

        That’s £900 million ground from the faces of us poor benighted taxpayers who actually have to do something economically positive to earn the money they use to fund this drivel. If OLEV or ULEV was worthwhile, and had a self-supporting business model, the private sector would fund it. What is it with government that they feel they have to do so much, to so little effect? Answers of a postcard … In plain language, it’s not just bonkers, it’s seriously wrong – and we’re doing nothing about it. Where’s my pitchfork?

      • HookesLaw

        The govts plan seems to be for 500 million over five years starting sometime in 2015. Hardly earth shattering.
        BMW are investing billions not millions in ULEVs. They are not the only car company.

        • Colonel Mustard

          BMW are not a national government with a £1.28 trillion debt. The UK government is not a car manufacturer but it is typical of the wonk-led stupid boy coterie running things here to operate as though they are a corporate management team, believing they are in charge of Britain plc., with a generous expense account, meanwhile flogging off anything not nailed down to Communist China and/or Russian gangsters.

          Cameron’s government on this are like a gambler in the Last Chance Saloon, throwing borrowed money away in the hope of winning some back through a crack-brained scheme that’s bound to be seen as a soft touch by every scam artist going.

          Setting up this “team” is typical of the gambling risks taken by impulsive Cameron who hasn’t a clue. It is not government business to develop cars.

          The UK will rue the day that these stupid boys were ever put in charge.

          • Colin56

            Well, they weren’t, were they? ‘Put in charge’, that is. the voters clearly said they didn’t want them, nor did they want the other lot; but they went ahead and cooked up a ‘Coalition agreement’ that effectively tore up the manifestos they had been loudly proclaiming to the country only days before. And almost their first legislative act was to ensure we could’t get rid of the chancres for a solid five years (Fixed Term Parliaments Act). It was a particularly British coup, and has been completely disastrous for the country ever since. The honest thing to have done would to have forced Brown to spin in the wind with a minority government; and put it comprehensively out of its (and our) misery with a confidence vote at the first opportunity. But Dave, George, Nick and Danny were far too keen to get inside their ministerial limos for anything democratic like that.

  • Torybushhug

    Is it any surprise borrowing is up when we have such profligate waste as exemplified by very costly deportation proceedings appealed over and again (let alone the migrants use of housing benefit etc), Assanges multi million quid Policing costs, ubiquitous costly enquiries, NHS paying £48m to one migrant family due to injury to their son, £4m average pension pot for GP’s and so on.
    We are vastly over entitled, little hope of us building a sovereign wealth fund which other nations have managed.

    • Colonel Mustard

      How much has the extended Met police junket to Portugal to dig up fields containing dead donkeys (and bring the public service into disrepute) cost the taxpayer?

    • berosos_bubos

      We all have a warm glow of pride knowing that our social safety net is being exploited across the globe.

  • telemachus

    Ha ha
    It is the economy, stupid
    The narrative changes
    Ed may be a geek but he will sort it all out

    • White Rose

      With Labour pledging to increase (capital) spending by borrowing more money IF they win the next election how exactly do you square that circle? If the government is having to borrow far too much now then Labour would just be pouring more petrol on the flames.

    • Wessex Man

      You sad slimy little liar, Ed is geek and he’s also not going to get anywhere near power.

      • telemachus

        Your party will guarantee it

    • Alex

      Which Ed? Is that the Ed who contributed to the 2008 crisis, or the Ed who everyone thinks is weird?

    • Inverted Meniscus

      He is promising to borrow more you moron.

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