Progress | Centre-left Labour politics

Budget 2017: 20 Tory failures

From abandoning their deficit targets to slashing funding for education, it is clear the Tories are failing on their own terms, argues Progress chair Alison McGovern MP


  1. The Tories have delayed their target on debt three times since 2010

Background: Their original target (2011) was to have debt falling by 2015-16. Then in 2014 that was delayed until 2016-17. Then in 2015 the target was to keep it falling every year until 2020-1. Then in 2016 that was changed to be ‘falling by 2020-1’.

At autumn statement 2012 the Office for Budget Responsibility first reported that the debt target was ‘more likely than not to be missed’.  At this point the target was ‘to see public sector net debt (PSND) falling as a share of GDP in 2015-16’. The target continued to be forecast to be missed until a new target was introduced; the OBR first assessed the new target in March 2015, at which time it was being met.

The debt target was next breached alongside Budget 2016. At this point the target was for ‘public sector net debt to fall as a percentage of GDP in each year to 2019-20’. The target continued to be missed until it was revised.


  1. The government have abandoned closing the deficit in this parliament

After the general election in 2010, George Osborne changed course from Alastair Darling’s March 2010 budget, introducing spending cuts aimed at eliminating the deficit. Yet since Osborne’s first budget, the Tories have only ever run a deficit and never a surplus.

Their original target was to achieve cyclically-adjusted current balance by the end of a rolling five year forecast period. In December 2014 this was changed to target a balance by the third year of the rolling five year period (ie by 2017). Then in autumn 2015 this was changed to be a surplus by 2020-1 and then keep running a surplus ‘in normal times’. Then in autumn 2016 this was changed to be a target to reduce net borrowing to below two per cent of GDP by 2020-21.

At the autumn statement 2016 the OBR judged that the government had broken their own deficit rule (the fiscal mandate). The Institute for Fiscal Studies now say ‘fiscal policy is not currently subject to any fiscal targets that can be met or missed in this parliament’. In other words, when it comes to the deficit, the government have let themselves completely off the hook.

Welfare cap

  1. The government had to change the welfare cap because they kept breaking it

The welfare cap was introduced in March 2014 and breached at autumn statement 2015, and continued to be breached until it was revised in autumn statement 2016.

Productivity and wages

  1. Labour narrowed the productivity gap, under the Tories it has widened

Labour narrowed the productivity gap between the United Kingdom and eurozone countries, but under the Tories it has widened again, growing from a seven per cent gap when Labour left office to an 11 per cent gap in 2015. Compared to the European Union average the UK has fallen from four per cent ahead in 2010 to one per cent behind in 2015, and while the UK still outperforms the Organisation for Economic Co-operation and Development average, the gap has narrowed from five per cent to three per cent.

This matters because productivity determines how much companies can raise wages.

  1. The UK is the only developed economy that has had a growing economy, but falling real wages from 2007-15 according to the OECD


The Tories have failed to invest in our future

  1. The IFS say that despite the new apprenticeship levy raising £2.8bn by 2019-20, most of this increase in revenue will not be used to fund apprenticeships.
  2. According to the IPPR ’employer investment in continuing vocational training per employee in the UK is half the EU average; investment in training and learning per employee fell by 13.6 per cent per employee in real-terms between 2007 and 2015′.


Labour invested in education, the Tories have cut it

  1. From 1997 until 2010, expenditure on education and training gradually increased in real terms. Since 2010 expenditure has decreased by £13.9bn at 2015-16 prices.
  2. Public expenditure on education and training steadily rose from 1997 and peaked at 5.7 per cent GDP in 2009. From 2010 onwards public expenditure drastically declined and is now at 4.7 per cent GDP.


  1. The percentage of patients seen in accident and emergency units within four hours has dropped by 10 per cent, from 98 per cent to 88 per cent, since Labour was in govt.
  2. 1.3 million more people are waiting for treatment now than in 2009, an increase of 54 per cent
  3. Between June 2012 and June 2015, the waiting list grew 18 per cent faster than population increases.
  4. The eight minute ambulance response target of 75 per cent has not been met since May 2015.
  5. Maternity nurses dropped 59 per cent between October 2010 and 2016, down from 7133 to 2942, a difference of 4191.
  6. Public and community health staff were down 43 per cent between October 2010 and October 2016

Social Care

The Tories have cut social care while the population of older people increase, leaving a huge funding gap

  1. The IFS pointed out that while real terms spending on adult social care has fallen by eight per cent, the population aged 65 and above has increased by around 16 per cent between 2010-11 and 2015-16. This leaves a huge funding gap which will increase as our population ages.
  2. This problem will only get worse. Our old age dependency ratio is weakening, and could be made much worse by lower immigration. In 2014, there were 310 pensioners for every 1000 working people. Under a low migration scenario, the OBR projects that there would be 380 pensioners for 1000 working age people, and under their central project, 370.

New Brexit risks

  1. The OBR calculated that the cost of Brexit to the public finances was an extra £58bn of debt
  2. The difference between the OBR’s central migration projection and their low migration projection is an extra £10bn of debt
  3. Falling sterling is a central factor in rises in inflation that will hit living standards


Alison McGovern is member of parliament for Wirral South and chair of Progress. She tweets at @Alison_McGovern



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Alison McGovern MP

is chair of Progress


  • “The welfare cap was introduced in March 2014…” We Know. It was with Tory-lite Labour’s help and support.

  • The centre stage element of Hammond’s budget speech was the ‘equalisation’ of National Insurance treatment of the both the self employed and the employed. This item was completely ignored in the Labour leaders speech in response to the budget. This item had been trailed prior to Hammond’s speech, so it was surprising that no thoughtful and considered response was forth coming in the pre prepared Labour leaders speech. I can only assume this shows a complete disregard of those among us who toil in insecure, hand to mouth self employment. A proportion of the working population that will soon outnumber those employed in the public sector. Hammond’s attempt at trying to play a progressive card in relation to this matter went unchallenged. How can we convince people operating in what is regarded euphemistically as the ‘gig’ economy that the Labour movement is on their side. I get the impression we’re considered ‘scab’ labour.

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