Finally: Number 10 admits that far from ‘dealing with debt’, the government is seeing it rise. This morning the Prime Minister’s spokesman was grilled on the party political broadcast that horrified Fraser last night in which the Prime Minister said ‘we are making progress. We’re paying down Britain’s debts.’
Fraser has explained the reality – that Cameron is in fact increasing Britain’s debt by 60 per cent – in this post with two unnerving graphs, and the Prime Minister’s spokesman conceded that ‘the debt as a percentage of GDP has risen’. Asked whether the Prime Minister understood the difference between the debt and the deficit, he said: ‘Yes, he does.’ By way of explanation for the broadcast, he added:
‘The point the Prime Minister was making is that it is the Prime Minister’s government that is taking the tough decisions to deal with the economic crisis the government inherited and we are making progress with that.
‘We have a long-term fiscal consolidation plan set out across this Parliament which will see debt as a percentage of GDP falling by 2016/17, that’s how we are getting debts under control.’
Note the way the spokesman refers to the debt target, which had been to have debt as a percentage of GDP falling by 2015/16. George Osborne admitted in the Autumn Statement that he would miss this by a year (and even that might prove too optimistic), but the way the PM’s spokesman has worded his response suggests that getting debt falling by 2016/17 is a sign that the government is indeed dealing with its debt, rather than missing its own targets.
The fact that the debt ratio is rising is no surprise: projections are published with every Budget by the OBR. Here are the latest forecasts:
Naturally Labour – regardless of its own plans for borrowing – is making as much of this as it can, complaining today to the UK Statistics Authority about the claim in the broadcast.