George Osborne: driving the country to further austerity. Photo: Getty
Show Hide image

Autumn Statement 2014 fallout: 60 per cent of cuts still to come

The main lesson to take from George Osborne's pre-budget announcements this week is that the worst of austerity is yet to come.

Following the Chancellor's Autumn Statement, which included some disappointing borrowing figures and confirmed that he had missed his deficit target, sees some worrying fallout today. Both worrying for the Conservatives politically and worrying for the future of the country's public services.

The Office of Budget Responsibility, in response to George Osborne's announcements, predicts that £14.5bn further cuts will need to be made to Whitehall departments by the end of the decade by the next government. The spending watchdog warns that 60 per cent of cuts are still to come in the next parliament, in spite of David Cameron's prediction that his government would have overseen 80 per cent of cuts by next year.

If the situation plays out as the OBR has warned, then our overall reductions could leave public spending at its lowest level since the 1930s, as a proportion of GDP. It also warns of a loss of 1m public sector jobs by 2020. 

Osborne is clearly rattled by this forecast. Being grilled on it on the BBC's Today programme this morning, he ended up snapping that he rejects the, "totally hyperbolic BBC coverage of spending reductions", comparing the broadcaster's coverage to its narrative in 2010 on spending cuts.

He admitted on the deficit: "I would loved to have gone further in this parliament, but we have been hit with all sorts of economic storms". He also acknowledged the tough cuts required in the future, saying, "I am the first to say there is more to do, we've got some difficult decisions to go on taking on public expenditure and the welfare bills."

Osborne said it was "nonsense" that he would be unable to achieve the further spending reductions. His fellow cabinet minister, the Lib Dem Business Secretary Vince Cable, disagrees. He dismissed his coalition partner's plan as, "simply not realisable".

With public services and local government squeezed to the point of suffering already, the OBR's warning could make the Tories a difficult sell to the electorate for a second time round. However, those who support the Conservatives believe that cuts to public spending rather than tax rises are the right direction, and may therefore respond favourably to Osborne's plea to allow him to "stay the course".

Anoosh Chakelian is senior writer at the New Statesman.

Getty Images.
Show Hide image

The Brexiteers' response to John Major shows their dangerous complacency

Leave's leaders are determined to pretend that there are no risks to their approach.

Christmas is some way off, but Theresa May could be forgiven for feeling like Ebenezer Scrooge. Another Ghost of Prime Ministers Past in the shape of John Major is back in the headlines with a major speech on Brexit.

He struck most of the same notes that Tony Blair did in his speech a fortnight ago. Brexit is a blunder, a "historic mistake" in Major's view. The union between England and Scotland is under threat as is the peace in Northern Ireland. It's not unpatriotic for the defeated side in an electoral contest to continue to hold to those beliefs after a loss. And our present trajectory is a hard Brexit that will leave many of us poorer and wreck the British social model.

But, as with Blair, he rules out any question that the referendum outcome should not be honoured, though, unlike Blair, he has yet to firmly state that pro-Europeans should continue to advocate for a return to the EU if we change our minds. He had a note of warning for the PM: that the Brexit talks need "a little more charm and a lot less cheap rhetoric" and that the expectations she is setting are "unreal and over-optimistic".

On that last point in particular, he makes a point that many politicians make privately but few have aired in public. It may be that we will, as Theresa May says, have the best Brexit. France may in fact pay for it. But what if they don't? What if we get a good deal but immigration doesn't fall? Who'll be blamed for that? Certainly we are less likely to get a good deal while the government passes up pain-free opportunities to secure goodwill from our European partners.

As with Blair, the reaction says more about British politics after Brexit than the speech itself. Jacob Rees-Mogg described it as "a craven and defeated speech of a bitter man". Iain Duncan Smith, too, thinks that it was "strangely bitter".

There is much to worry about as Britain leaves the European Union but the most corrosive and dangerous trend of all is that section of the Leave elite which requires not only that we implement Brexit but that we all pretend that there are no risks, no doubts and that none of us voted to Remain on 23 June. That Blair and Major's speeches - "You voted for it, so we'll do it, but it's a mistake" - are seen as brave and controversial rather than banal and commonplace statements of political practice in a democracy are more worrying than anything that might happen to the value of the pound.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.