The public finances continue to be in better and better shape despite Brexit approaching, with the latest ONS figures showing borrowing in the financial year-to-date at its lowest level since 2001. This puts the Government on track to come in under its OBR target of £25.5 billion net borrowing for the year. This is a step in the right direction but it is still £25.5 billion added to the national debt of almost £1.8 trillion – there is no excuse for any government to turn its back on fiscal responsibility…

Excluding state-owned banks, public net borrowing actually recorded a January surplus of £14.9 billion, the largest since records began in 1993. It was fuelled by record high tax takings, with self-assessed Income Tax and Capital Gains Tax January receipts both at their highest levels since records began. Record tax takings is hardly what you’d expect from a party that has genuinely been “taken over by the right” as Anna Soubry likes to claim…

The Treasury will have something to celebrate over Christmas with the news that UK’s budget deficit has narrowed to its smallest since 2002-3. The latest figures show public sector net borrowing of a mere £7.2 billion in November – the lowest for a November since 2004. Excluding net investment, the UK has actually run a surplus of £13 billion over the last 12 months. Osborne’s target of 2015 is long gone but better late than never…

Marr: “Can you say when the deficit under your plans will be eliminated?”

Gardiner: “No, I’m not going to say that at all.”

Spoiler: it won’t be. Not that the Tories have a much better idea, they said it would be closed by 2015, then 2020ish, now 2030ish…

“The deficit is clearly not under control” says Conservative peer Lord Maude #newsnight pic.twitter.com/kCt47OCx6u

— BBC Newsnight (@BBCNewsnight) September 12, 2017

Truth bullets from Francis Maude on Newsnight last night:

“The deficit is clearly not under control. We are in quite a sustained period of economic growth and yet we still have a budget deficit that is too big. We should be at this stage in a place where the budget deficit has been eliminated and we’re getting towards a surplus. We’re not. So the idea that there is suddenly lots of money around is complete fantasy… I’m not happy that we are giving the impression that we can suddenly spend money to alleviate a particular political pressure point.”

He is right, the Tories have pushed back closing the deficit until 2025, ten years later than they promised. They have added £500 billion to the national debt in 7 years, Hammond now plans to add a billion a week to the burden. Voters who experienced the public sector pay cap over the last 7 years after being told it was necessary to to close the deficit will now be wondering why the same Tories now say it’s okay to splash the cash and kick the can down round. The government’s claim to be pursuing a policy of “sound money” is risible…

More taxes, more spending, more borrowing, slower deficit reduction, wobbling on tuition fees and ending the public sector pay cap – some members of the Cabinet are becoming Torbynistas. Jeremy Hunt has demanded the “1% cap for NHS workers” is lifted, Justine Greening wants the same for teachers. Now Boris is briefing out he “strongly” believes the public sector pay cap should go. The IFS says copying Jezza’s cap-ditching policy would cost £9.2 billion per year, at a time when the national debt stands at nearly £1.9 trillion…

The 1% cap figure is also very misleading. Many NHS workers and teachers get a salary rise each year additional to national pay. As former minister Rob Wilson points out, this isn’t widely known and is worth several hundreds of pounds a year to several thousand pounds a year depending on salary band. The 1% figure everyone uses isn’t the whole story, for many the real number is more like 4%.

This outlines how teachers get paid wage increases additional to national pay. Qualified teachers’ pay scales | Tes https://t.co/eQhabnPBJx

— Rob Wilson (@RobWilson_RDG) July 3, 2017

I will try to check what the actual rate of wage increase was last year in NHS. I think it was 4% from memory. https://t.co/ZbeZFn3vDT

— Rob Wilson (@RobWilson_RDG) July 3, 2017

As the IFS says, in the last ten years public sector pay has accelerated faster than the private sector. Indeed earlier this year the IFS reported public sector workers are still being paid hundreds of pounds a year more than their private sector counterparts, despite “austerity“. None of the Torbynistas calling for an “end to austerity” are talking about how they are going to pay for it. For Boris this could be the most expensive Tory leadership campaign in history…

Encouraged by her new chief of staff Gavin Barwell, Theresa May is aggressively pursuing the dangerous narrative that “austerity is over”. Barwell told Newsnight that he lost his seat because public sector workers in his constituency wanted a pay rise. May has apparently accepted this analysis and told Tory wets she will pursue Labour-lite economics to win back Corbyn voters. Hers was already the most economically left-wing Red Tory manifesto since the seventies and it was rejected by the public. By contrast David Cameron won a majority while Labour screamed about spending cuts. The Tories had a 24 point lead before the manifesto was released – it was the dementia tax and the student offer not austerity that lost them their majority. Ending austerity is the wrong inference from May’s failure…

The national debt is nearly £1.9 trillion. It grows at a rate of £5,170 per second. The debt burden is 86% of GDP, more than double what it was pre-2008. Public sector borrowing is £51.7 billion this year – that is government overspending by £1 billion a week. May’s manifesto already kicked the deficit reduction can down the road to 2025, ten years later than George Osborne’s original so-called austerity programme. Young voters chose Corbyn, now May wants to win them back by saddling them and future generations with even more debt.

The only Cabinet minister who so far seems to recognise the recklessness of all this is Michael Gove, who told the Today programme “we need to get on with the job of reducing the deficit so that we do not saddle the next generation with a burden of debt”. The trouble with the government’s “austerity is over” spin is the deficit and debt can’t be spun away. If the gilt market loses confidence interest rates shoot up, as inflation takes off wage demands will spiral and the UK’s own version of Chavez will be installed. CPI has hit a 2.9% high this morning, above expectations. Not a good signal to loosen the fiscal stance and abandon austerity…