Forever in his shadow: George Osborne has yet to achieve the more modest targets of his predecessor, Alistair Darling. Photo: Getty Images
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Budget 2015: George Osborne misses his targets again

George Osborne has offered some reprieve on austerity. Let’s hope it gets used wisely.

The usual politics of elections might dictate promising lots of goodies during the campaign and tightening the purse strings once safely in Government. George Osborne appears to have somewhat turned this upside down. The Conservative manifesto promised to eliminate borrowing by 2018-19. Today’s budget speech pushed back the deadline to 2019-20.

Annual day-to-day departmental spending is to be cut by just under £18 billion by 2019-20, or around five per cent in real terms. That doesn’t sound too bad: the OBR says that no year will see cuts as severe as in 2011-12 and 2012-13. However, not all is rosy. Where public spending goes is still seeing big changes. Promises for some public services will mean difficult choices for others. The NHS is to receive an extra £10 billion in real terms by 2020-21, and the MoD budget is to rise by 0.5 per cent in real terms a year. Prior to the election, promises were made on schools funding and international aid. Taken together, this could mean day-to-day spending rising by just under £10 billion by 2019-20 in some areas.

So other public services will still need to make substantial savings to pay for money going to the NHS, schools, aid and defence. However, departments will have more time to find the full savings needed, with the deadlines now pushed back. That’s important because after the last Parliament, the easiest savings will have already been made. In the SMF’s pre-Budget publication, One More Time, we argue that Government will need to take more time in trying to identify the next tranche of savings. Most likely, big reforms will be needed that look ahead to the longer-term challenge of an ageing population, as pointed out in the OBR’s Fiscal Sustainability Review. Giving departments breathing room to do this will ensure that big reforms are not rushed through at a higher price later on.

We will need to wait until the Autumn Spending Review to find out how different departments are set to share the cuts. However, an important principle that must run through the entire Spending Review programme is the need for investment in long-term growth to deliver sustainable rising incomes. Here, there may be reasons to worry. Whilst there is to be a levy on firms is to raise additional sums to fund apprenticeships, gross investment spending has been marked down compared to the March Budget. The roads investment fund paid for by Vehicle Excise Duty will only kick in at the end of the Parliament. The new fiscal rule targeting overall borrowing including investment also increases the vulnerability of capital spending.

Given the UK’s record on productivity, now is not the time to slow down on capital investment. George Osborne has offered some reprieve on austerity. Let’s hope it gets used wisely.

Nida Broughton is Senior Economist at the Social Market Foundation.

Twitter/@suttonnick
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From "cockroaches" to campaigns: how the UK press u-turned on the refugee crisis

Harrowing photos of a drowned toddler washed up on a Turkish beach have made the front pages – and changed the attitude of Britain's newspapers.

Contains distressing images.

The UK press has united in urging the government to soften its stance on the record numbers of people migrating to Europe. The reason? A series of distressing photos of the body of a three-year-old Syrian boy, face down in the sand on the Turkish coast.

Most papers decided to run one or more of these pictures on their front pages, accompanying headlines entreating David Cameron to take notice. While your mole wholeheartedly supports this message, it can't help noticing the sudden u-turn executed by certain newspapers on the subject of the refugee crisis.

First, they used to call them "foreigners" and "migrants" (a term that has rapidly lost its neutrality in the reporting of the crisis) who were flooding Europe and on the way to "swarm" the UK. Now they've discovered that these people are victims and refugees who need saving.


 

Photos: Twitter/suttonnick


The Sun went so far as to run a column by Katie Hopkins five months ago in which she referred to them as "cockroaches" and "feral humans". She wrote:

Show me pictures of coffins, show me bodies floating in water, play violins and show me skinny people looking sad. I still don't care. Because in the next minute you'll show me pictures of aggressive young men at Calais, spreading like norovirus on a cruise ship. Make no mistake, these migrants are like cockroaches.

Photo: Twitter

Now the same paper is urging the government not to "flinch" from taking in "desperate people", those in a "life-and-death struggle not of their own making":

Photo: Twitter/@Yorkskillerby


And the Daily Mail still seems confused:

 

It's not really the time for media navel-gazing, but perhaps the papers that have only just realised the refugees' plight can look closer at the language they've been using. It may have contributed to the "dehumanising" effect for which Cameron and co are now being condemned.

I'm a mole, innit.