George Osborne has declared victory over Ed Balls, the IMF and all the others who warned that his austerity measures would throw Britain back into recession. But his triumphalism obscures a huge failure: his inability to contain the national debt. While the UK economy has been growing strongly (it is currently the fastest-growing of any developed country) the public finances have taken a dramatic and sudden turn for the worse. It emerged this week that, between April and September, the Chancellor borrowed £58 billion — £5.4 billion more than during the same period last year.
Osborne’s original plan to eliminate the structural deficit by the election has been off course for a long time, but it is now going backwards. This is embarrassing for a Chancellor who is about to fight the next election on financial competence. Yes, the number of jobs is soaring, but only because salaries are so miserable. The nature of the jobs created — chiefly, those at the bottom of the pay scale — explains why tax revenue is not being generated as fast as he expected.
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