Osborne wobbles but 2020 is still a big ask


Flip Chart Fairy Tales

I have long thought that George Osborne would eventually have to scale back his planned public spending cuts. Sooner or later, the circles in the 2015 dilemma would wobble. Taxes would increase, cuts to services and welfare would be scaled back and the deficit reduction timetable would be lengthened. I didn’t expect it to happen so soon, though. I thought we’d get at least one more sabre-rattling budget before a combination of ‘unexpected events’ gave cover for a retreat.

So, like many other people, I was surprised when I saw the public spending projections. What looked insane in December and was modified to merely ludicrous in March now seems almost reasonable by comparison. The £42 billion cut in day-to-day public service spending has become an £18 billion cut with an extra year to achieve it.

Screen Shot 2015-07-09 at 16.31.10

Source:OBR Economic and fiscal outlook

That’s not to say that there won’t now be significant reductions in public service spending. As Paul Johnson…

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