Osborne promises budget surpluses – but deficit reduction is flatlining
It's easy to offer up promises of budget surpluses at a party conference, but chancellor George Osborne's track record in government offers something more tangible.
While the Office for Budget Responsibility (OBR) does forecast that net borrowing will fall to 6.5 per cent of GDP by the end of the coalition government, the UK is currently seeing a fairly constant deficit – fixed around the £120bn mark for around three years.
(OBR)
To satisfy Osborne's claim that we'll see budget surpluses with him at the helm for another term, we'll need to sharp decreases in government borrowing. It's not immediately apparent where those savings are coming from.
While the Conservatives have ramped up the spending on work age benefits – these don't make up a huge amount of public sector spending. The total work and pensions bill in 2011-12 stood at £167bn, but non-pension benefits comprised just £84.8bn of that, or 12 per cent of government spend in that year.
Many of the measures introduced at this Conservative Party Conference deal only with claimants of Jobseekers Allowance, which made up a puny 0.7 per cent of government spending in 2011-12. While there are debates to be had over whether unemployment benefit interferes with work incentives, we can be certain that eliminating it would have a very small impact on total public sector borrowing.
In order to achieve a budget surplus Osborne will need to introduce some more substantial cuts to get us there. The last time the UK saw a surplus was in 2001 – When Labour's Gordon Brown was chancellor, but following the spending plans of his Tory predecessor Ken Clarke.