General election factwatch: Has the UK's deficit come down by two thirds?

Deficit claim: Prime Minister Theresa May made the claim on the BBC's Andrew Marr Show
PA
15 May 2017
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Claim: The UK’s deficit has come down by two thirds.

Key quote: ‘We see the deficit coming down by two thirds’ Theresa May, 30 April 2017 (Andrew Marr interview)

Analysis: The government’s ‘headline measure’ of the deficit is ‘public sector net borrowing’. That’s the difference between the government’s total income and everything it spends. Put another way, it’s how much government debt is increasing each year.

On this measure, the deficit went from 9.9% of GDP to 3.8% between 2009/10 and 2015/16. That’s a decrease of a little under two thirds. For 2016/17 it’s forecast at 2.6%, which would be down by almost three quarters.

GDP is the value added by everything made in the UK each year, including service industries. It’s used as a measure for the size of the economy.

The amount the government actually borrowed fell from £166 billion to £72 billion since 2009/10 (in 2015/16 prices). The forecast deficit for 2016/17—£51 billion—is also two-thirds lower than it was in 2009/10.

The government targeted a different measure of the deficit back in 2010, called the “cyclically-adjusted current balance”. This measure doesn’t count investment spending and is adjusted to take into account the state of the economy. The government is forecast to eliminate it in 2018/19, three years later than planned.

In 2015, the government aimed to eliminate public sector net borrowing by 2019/20. That isn’t forecast to be achieved in the next five years.

Chancellor Philip Hammond set out new targets in the 2016 Autumn Statement, to eliminate the deficit ‘as soon as possible’ in the course of the next parliament. We don’t know whether he expected the next parliament to be so soon.

Verdict: Correct. The deficit is down by nearly two thirds as a proportion of GDP.

Full Fact is the UK's independent fact-checking organisation. For sources and more fact checks go to fullfact.org.

To learn more about Full Fact's election crowdfunder click here.

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