There was no such thing as austerity

The Taxpayers’ Alliance has published depressing figures about the so-called “austerity”. In real terms, public spending has fallen by just 0.2 per cent since 2009 – further proof of the benefits of no longer having George Osborne (Chancellor for six of those eight years) in the Treasury.

The Office for Budget Responsibility said that by 2016-17 public sector net debt would be 66 per cent of GDP: it was in fact 86 per cent. Debt is forecast to rocket in the 2030s at a rate that would take it to a crippling 234 per cent of GDP in 50 years’ time – not least because of our ageing population, for whom we still have no responsible plan.

The Bank of England’s chief economist, Andrew Haldane, has signalled that he has changed his mind and interest rates should rise, to combat inflation. If they do, that massive debt will become yet more expensive to service. I fear even if the Tories had won a huge majority they would not have cut spending. Now there is no chance.

The Treasury is probably praying for inflation to erode the value of the debt. If interest rates don’t go up, we shall learn just how independent the Bank is.