Campaigners arguing for action on tax avoidance yesterday. Photo: Getty.
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The scariest bit of the budget — the one graph you need to know

Today's headlines hide the most important, and least reassuring, fact in yesterday’s Budget.

Read this piece on our election site, May2015.com.

“Sun shines on savers”, “UK booming…Jobs at record high”, “The comeback king”, “End of tax on savings”. The four papers likely to back the Tories in May – the Mail, the Sun, the Times and the Telegraph – have delivered their verdict on the Budget, and they paint a pleasant picture.

But the headlines hide the most important, and least reassuring, fact in yesterday’s Budget: to eliminate the deficit, Osborne is going to cut spending more severely in the next two years than the coalition has in any year so far.

Here’s the key graph. It’s as trustworthy as they come. It was made by the Office for Budget Responsibility – an independent body that exists to analyse the public finances.

The Tories are planning to cut spending by 5.1 per cent in 2016-17 and 4.6 per cent in 2017-18. That’s greater than in any year since austerity began in 2010, and nearly twice as much as the average cut over the past five years (2.8 per cent).

The cuts scheduled for next year are more than four times greater than the cuts Britain is facing over the next twelve months.

Next year's cuts will be four times greater than those Britain is facing this year.

After two years of deep cuts (2016-17 and 2017-18), Osborne plans to return to this year’s more moderate levels of austerity in 2018-19, before increasing spending dramatically in 2019-20 (by 4.3 per cent). [1]

This is purely political. By cutting spending sharply at first, Osborne can deliver a final dose of medicine and then suddenly start spending just before the 2020 election.

There is no economic basis for this. As the FT put it, an “ever more annoyed” Robert Chote, chair of the OBR, tersely described Osborne’s plan as a “rollercoaster”. The Times, in contrast to their front-page, concurred, with a double page spread on how “Experts warn of a rollercoaster ride in row over public spending”.


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Instead of this “bonkers” approach (the Guardian’s Patrick Wintour), Osborne could balance the cuts across all four years. The austerity in each year would be lower than the average over the past five years, and far more manageable for the services set to be slashed.

Government spending isn’t abstract. Osborne can’t just take a few pennies of one year, add them back in the next, and easily replace the services he’s crippled.

[1] These figures are on p.129 of the report.

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Who will win in Manchester Gorton?

Will Labour lose in Manchester Gorton?

The death of Gerald Kaufman will trigger a by-election in his Manchester Gorton seat, which has been Labour-held since 1935.

Coming so soon after the disappointing results in Copeland – where the seat was lost to the Tories – and Stoke – where the party lost vote share – some overly excitable commentators are talking up the possibility of an upset in the Manchester seat.

But Gorton is very different to Stoke-on-Trent and to Copeland. The Labour lead is 56 points, compared to 16.5 points in Stoke-on-Trent and 6.5 points in Copeland. (As I’ve written before and will doubtless write again, it’s much more instructive to talk about vote share rather than vote numbers in British elections. Most of the country tends to vote in the same way even if they vote at different volumes.)

That 47 per cent of the seat's residents come from a non-white background and that the Labour party holds every council seat in the constituency only adds to the party's strong position here. 

But that doesn’t mean that there is no interest to be had in the contest at all. That the seat voted heavily to remain in the European Union – around 65 per cent according to Chris Hanretty’s estimates – will provide a glimmer of hope to the Liberal Democrats that they can finish a strong second, as they did consistently from 1992 to 2010, before slumping to fifth in 2015.

How they do in second place will inform how jittery Labour MPs with smaller majorities and a history of Liberal Democrat activity are about Labour’s embrace of Brexit.

They also have a narrow chance of becoming competitive should Labour’s selection turn acrimonious. The seat has been in special measures since 2004, which means the selection will be run by the party’s national executive committee, though several local candidates are tipped to run, with Afzal Khan,  a local MEP, and Julie Reid, a local councillor, both expected to run for the vacant seats.

It’s highly unlikely but if the selection occurs in a way that irritates the local party or provokes serious local in-fighting, you can just about see how the Liberal Democrats give everyone a surprise. But it’s about as likely as the United States men landing on Mars any time soon – plausible, but far-fetched. 

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