Some of George Osborne’s targets – like balancing the books – are always five years away; he never has to meet them to claim success, as long as he plans to achieve them. But having a falling cash-terms deficit he can be measured on. In March, the OBR forecast that borrowing for 2013-14 would come in just half a billion pounds under last year’s total. It now looks like Osborne will easily meet his target.
Public borrowing for September this year was £1 billion lower than for the same month in 2012. For the government’s financial year so far, Osborne has borrowed £6 billion less than at the same point last year (but that’s still almost £57 billion).
Borrowing figures have been helped by the strengthening economy. That’s boosted tax receipts. Income tax and CGT receipts are up by 12 per cent over last year, and consumer confidence returning means more spending – and higher VAT receipts too.
The truth is, George never intended to cut government spending. He thought he could rely on economic growth to reduce the deficit if he held spending steady. When growth didn’t come, we were left with mammoth deficits. Now that the economy is expanding again, deficits are – slowly – shrinking.