George Osborne leaves the HM Treasury building before heading to deliver his Autumn Statement. Photograph: Getty Images.
Show Hide image

Osborne stands by plan to continue cuts even after the deficit is gone

By insisting that a surplus of £23bn is necessary to reduce the national debt, the Chancellor has exposed himself to the charge that he is an ideologue. 

The reason the OBR now famously forecast that public spending would fall to its lowest level since the 1930s under George Osborne's plans is his intention to continue cutting even once the deficit has been eliminated. Owing to £14.5bn of additional tightening in 2019-20, the Chancellor is predicted to achieve a surplus of £23bn, far beyond what most economists consider necessary to stabilise the public finances (a surplus of £4.8bn is forecast in 2018-19). It is this that has allowed Labour to accuse the Tories (as Ed Miliband did at today's PMQs) of having a plan for "shrinking the state", rather than merely "balancing the books". The party believes that the fear of slashed and burned public services could win it the election. 

In an attempt to repair some of the political damage inflicted on the Tories, the Financial Secretary to the Treasury, David Gauke, told The Sunday Politics on 7 December that the party was not bound to a surplus of £23bn. He said: "We’ve made very clear we are committed to a surplus. At the moment the OBR predicts that we will have a surplus of £23bn, but we’re not making a commitment to the British people, 'that’s what the number will be in 2019'." 

Appearing before the Treasury select committee this afternoon, Osborne had the chance to do the same and dispel the image of him as an unrelenting axeman. But when questioned on the subject, he instead argued it was necessary to continue cutting in order to reduce the national debt as a share of GDP. He also said: "It’s absolutely the spending proposals that I submitted to the OBR." 

By emphasising the Tories' fiscal conservatism, Osborne is gambling that the voters will side with them over an opposition still viewed as profligate. But the opening he has provided for Labour means that fear of future cuts will now compete with fear of higher borrowing in the minds of voters. It is a battle that he is far from certain to win. As I noted yesterday, the latest ComRes/Independent survey found that 66 per cent do not believe that cuts should continue until the overall deficit has been eliminated with just 30 per cent in favour. 

Labour's shadow chief secretary to the Treasury, Chris Leslie, has said in response: "George Osborne has finally admitted he approved the plans for deeper cuts which the OBR says will take public spending as a share of GDP back to 1930s levels. 

"After two weeks when the Tories have tried to say it's somehow the BBC's fault, George Osborne has come clean that these are his plans. The Tories are now pursuing increasingly extreme and ideological plans for much deeper spending cuts which go well beyond balancing the books.

"In contrast Labour will take a tough but balanced approach to cut the deficit each year and balance the books as soon as possible in the next Parliament. Our plan will make sensible spending cuts in non-protected areas, fairer choices like reversing the Tory tax cut for millionaires and change our economy so we earn our way to rising living standards for all."

George Eaton is political editor of the New Statesman.

Show Hide image

Appreciate the full horror of Nigel Farage's pro-Trump speech

The former Ukip leader has appeared at a Donald Trump rally. It went exactly as you would expect.

It is with a heavy heart that I must announce Nigel Farage is at it again.

The on-again, off-again Ukip leader and current Member of the European Parliament has appeared at a Donald Trump rally to lend his support to the presidential candidate.

It was, predictably, distressing.

Farage started by telling his American audience why they, like he, should be positive.

"I come to you from the United Kingdom"

Okay, good start. Undeniably true.

"– with a message of hope –

Again, probably quite true.

Image: Clearly hopeful (Wikipedia Screenshot)

– and optimism.”

Ah.

Image: Nigel Farage in front of a poster showing immigrants who are definitely not European (Getty)

He continues: “If the little people, if the real people–”

Wait, what?

Why is Trump nodding sagely at this?

The little people?

Image: It's a plane with the name Trump on it (Wikimedia Commons)

THE LITTLE PEOPLE?

Image: It's the word Trump on the side of a skyscraper I can't cope with this (Pixel)

THE ONLY LITTLE PERSON CLOSE TO TRUMP IS RIDING A MASSIVE STUFFED LION

Image: I don't even know what to tell you. It's Trump and his wife and a child riding a stuffed lion. 

IN A PENTHOUSE

A PENTHOUSE WHICH LOOKS LIKE LIBERACE WAS LET LOOSE WITH THE GILT ON DAY FIVE OF A PARTICULARLY BAD BENDER

Image: So much gold. Just gold, everywhere.

HIS WIFE HAS SO MANY BAGS SHE HAS TO EMPLOY A BAG MAN TO CARRY THEM

Image: I did not even know there were so many styles of Louis Vuitton, and my dentists has a lot of old copies of Vogue.

Anyway. Back to Farage, who is telling the little people that they can win "against the forces of global corporatism".

 

Image: Aaaaarggghhhh (Wikipedia Screenshot)

Ugh. Okay. What next? Oh god, he's telling them they can have a Brexit moment.

“... you can beat Washington...”

“... if enough decent people...”

“...are prepared to stand up against the establishment”

Image: A screenshot from Donald Trump's Wikipedia page.

I think I need a lie down.

Watch the full clip here:

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland