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.

Sign Up

Get the New Statesman's Morning Call email.

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.