Is the deficit down by two thirds?
19th Apr 2017
The deficit is down by nearly two thirds.
This is correct, looking at the deficit as a proportion of GDP. Between 2009/10 and 2015/16 public sector net borrowing decreased from 9.9% of GDP to 3.8%, or by around two thirds.
“I will be taking out to the country in this campaign a proud record of a Conservative government: … an economy with the deficit nearly two thirds down.”
Theresa May, 19 April 2017
“In 2010 they promised to eradicate the deficit by 2015. In 2015 they promised to eradicate the deficit by 2020.”
Jeremy Corbyn, 19 April 2017
This is correct, looking at the deficit as a proportion of GDP, and is a claim the government has made before.
‘Public sector net borrowing’ is the headline measure of the government’s budget deficit. It’s the difference between the government’s income (mainly taxes) and everything it spends on public services, investment, and debt interest.
Borrowing as a proportion of GDP decreased because the amount the government borrowed over this time fell from £166 billion to £72 billion (in 2015/16 prices). At the same time the UK’s GDP also increased.
But the deficit didn’t fall as far as planned, as Mr Corbyn pointed out.
But when the government said it would balance the deficit by 2015 and create a budget surplus by 2020 it wasn’t referring to the same measure each time.
In 2010 the government promised to eliminate the “cyclically-adjusted current balance” by 2015/16.
This measure of the deficit ignores investment spending. It’s also adjusted to take into account whether the economy is in a ‘boom’ or ‘bust’ period.
In 2015 the government updated its plans and aimed to have a surplus on public sector net borrowing by 2019/20. This is the wider headline measure we discussed above, which unlike the 2010 measure includes investment spending and isn’t cyclically-adjusted. This means that the government would have to reduce spending by more than under the previous target.
Update 21 April 2017
We updated this piece with Mr Corbyn's comments and added a section on the government's commitments to balance the deficit.
This fact check is part of a roundup of Prime Minister's Questions, factchecked. Read the roundup.