Comparative recovery

The UK will grow faster in 2014 than any of the other major economies, the International Monetary Fund said last week. It gave George Osborne something to crow about and the chance to have a dig at the IMF for its previous pessimism about Britain’s economy.

Of course, a bit of growth at last is to be welcomed even if, by previous standards, it is still very weak. How far does this ‘best performing economy in the G7′ claim stack up though?

Fortunately, the IMF published its World Economic Outlook last week, so we have some up-to-date figures against which to compare the UK with other major economies. As a bit of fun, I’ve added Greece in too, for reasons which will become clear.


Source: IMF World Economic Outlook

All the economies took a dive in 2007-08 but many of them have already recovered their lost GDP. The UK is forecast to get back to its pre-recession GDP in 2014, one year later than Japan, three years later than France, Germany and the US and four years later than Canada.

The projections for per capita GDP are even less flattering. Granted, Britain’s population has risen faster than that of some other countries but, according to the IMF, our GDP per person will not get back to its pre-recession level until 2017. That’s one year after France, four years after Japan and the US, five years after Canada and six years after Germany. No wonder people say they are not feeling the recovery.

GDP Per Capita IMF


Source: IMF World Economic Outlook

It could be worse though. Under these scenarios, on both measures, Italy and Greece end the decade without ever having recovered their lost GDP. (The per capita figures for Greece look slightly better because its population has been falling since 2012.)

Let’s look at the growth projections then. True enough, the UK is forecast to be the fastest growing country in 2014. It seems that will only last for a year though.

GDP growth

All we are doing here is playing catch-up. Other countries have already recovered their pre-recession GDP. Our economy has to grow quickly to make up for having grown so slowly for the past four years.

The growth figures for Greece make an interesting comparison. If the IMF is right, for the second half of this decade, the Greek prime minister will be able to make speeches boasting that his country has one of the highest growth rates in the OECD and that it is outstripping anything the G7 countries have achieved since the recession. If he does, he’ll be right but, by 2020, his country will still not have fully recovered from the crash. All this growth will mean is that his country will be a bit less basket-casey than it is now.

If your economy has crashed and relatively low growth has followed, you need a big boost to catch up. For Greece, even four years of mega growth won’t be enough. For Britain, this year’s 2.9 percent, while welcome, is still not enough to catch up with the economies against which we usually compare ourselves.

The UK’s recovery is weak by historical standards as, to be fair, is that of the rest of the developed world. But our recovery has also been weak when compared to most of the G7. This year’s growth projection looks better than anything we have seen recently but it still feels like watching a slow moving river after a drought.

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The social media pillory

Last week there was an almighty row about people taking pictures of women eating on the Tube and posting them on Facebook. Going by the media and Twitter commentary, everybody seemed to agree that this was a Bad Thing. Even the BBC Breakfast presenters looked suitably grave when they announced the story.

Eventually, the man behind the Facebook page was tracked down. When he appeared on the Today programme yesterday, there was another outbreak of harrumphing. The general consensus seemed to be that this sort of thing really shouldn’t be allowed. By the end of the week, the outrage was still in full flow, the police were being called in and a group of women were planning to stage a mass eat-in on the Underground.

I find all this a bit odd. We are a society that revels in public humiliation. Tabloids have whole pages devoted to celebrities seen walking out in bad outfits or carrying a bit too much weight. Social media is full of pictures of people unwittingly photographed for ‘fashion crimes’, falling asleep or simply looking a bit odd. And there are lots of pictures of people eating on trains. You’ll find the same sort of stuff on YouTube. Videos of people falling over in the street, wearing funny clothes or just being fat are, apparently, very funny.

Two years ago, a video of a man trying to catch his dog in Richmond Park made headlines. The YouTube clip of Fenton and his clearly distressed owner was seen around the world. Just about everybody agreed that it was hilarious. BBC Breakfast, its moral compass spinning wildly, invited the man who posted the video onto the programme, with his son, to discuss how people might make money out of this sort of prank. Not once during the interview did anyone suggest that there might be something just a little bit wrong with this. A few commentators raised concerns, Simon Kelner and Paul Merton for example, but the overwhelming consensus was that the whole thing was just a great laugh. Few people spared a thought for the dog’s owner who was, inevitably, tracked down and outed by the press.

What seems to have got people riled up about the pictures of women eating on the tube is the element of misogyny. At least, that seems like a reasonable assumption, given that the Facebook page specifically targets women. Already, the revenge campaign has started, with pictures of men looking silly on the Tube being posted on Twitter and Facebook.

So is that it? We only get outraged at the online humiliation of total strangers if it is misogynistic or (presumably) racist or homophobic. Otherwise it’s OK. Given the reaction to this and the total indifference to other forms of public ridicule, it certainly looks that way.

One of the best pieces about this is the one that started the row, written by Sophie Wilkinson, the journalist who discovered her photo on the Facebook page. She admits that she used to indulge in stranger-shaming:

I’ve perused blogs such as “Look At My F**king Red Trousers” and properly laughed at “Jeans and Sheuxs” (anonymous photos of the fashion crime of wide-legged denim with smart pointy shoes). I admit that I’ve taken photos of people without their permission and uploaded them to social networks or texted them to friends – although it’s never been broadcast to thousands of people and it’s never for something so basic as eating food on public transport.

It’s not illegal, but it is a bit odd when you think about it. When we’re in environments such as the Tube or on the web, we feel anonymised, and looking through the periscope of our cameras, we’re disconnected from the situation. Obviously, since my experience, I’ve decided that I’m never going to stranger-shame again.

She also says that the ‘women’s revenge’ backlash is missing the point:

Since I appeared on the Facebook group, dozens of people have been in touch, including creators of a women-eating-on-the-Tube flashmob set up with the intention of getting lots of women to eat on the Underground to overwhelm and defy any would-be photographer. There is also now a group setting out to shame men taking photos of women eating on the Tube.

But I do question whether e-vigilantism is the way of getting things done. Instead, I hope that by identifying the phenomenon of stranger- shaming, people will think twice before doing it. I don’t want anyone – female, male, old, young, wearing a diamante belt buckle reading “porn star” – to be shamed like this.

To really stop this from happening, we need to police ourselves. Next time you see someone wearing or doing something weird, don’t get a phone out. Do your friends really want to see that picture of the guy in socks and sandals? Are you really going to be the equivalent of that old family friend who would come round to show you a slideshow of their holidays? Shame on you if so.

The desire to humiliate strangers is one of the uglier aspects of our culture. The Facebook page about women eating on the Tube will probably be taken down but those ridiculing people for all sorts of other things will multiply. It is curious that we only decide this sort of behaviour is a Bad Thing when it crosses the line into sexism.

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More freelancers than public employees: Is that really a Good Thing?

Ben Dellot started something when he suggested that there might be more self-employed workers than public sector employees by 2018.

Number of self-employed and public sector workers 2010 -2020


Rob Grant pitched in, saying he reckons that London has already gone past the tipping point.

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Some people seem to think this will be a very good thing. Luke Johnson, for example, writing in the FT:

Some commentators say the rise of flexible labour is not to be confused with a rise in entrepreneurialism. This is a counsel of perfection. Society needs the self-sufficient. An over-large welfare state breeds dependence and a deadly sense of entitlement, which only impoverishes us all. In any event such systems are unaffordable in the 21st century, as countries such as Greece, Italy and even France are discovering.

It’s interesting that he mentions Greece and Italy, both of which have among the highest levels of self-employment in the developed world.

It got me thinking, though, before we celebrate this tipping point, it might be interesting to compare the balance between public sector workers and the self-employed across the rest of the developed world.

I dug out the figures for government employment and self-employment for 2011 as that is the latest year for which I could find a full dataset. (There are one or two figures that look slightly odd here. In Germany and the Netherlands, public employment looks light because they outsource a relatively high proportion of their public service provision.)

I have also added productivity and per capita GDP figures for 2011 to the dataset for comparison.

Self-employment & public sector employment, OECD, 2011

Self-employmentv Public Sector


Sources: OECD Factbook, OECD Government at a glance

Let’s see what that looks like on a graph. The countries with more public sector workers than self-employed are on the left.

Balance between public sector employment and self employment

Self-emp v public sector


The first thing that strikes you is that the richer countries tend to be on the left and the poorer ones on the right. Even Germany and the Netherlands are further up the scale than they would be if less of their state activities were outsourced. Those economies where the labour force contains a high number of self-employed people tend to be poorer.

Let’s compare these figures with per capita GDP.

Slef Empb Pub Sec GDP

In general, then, the greater the balance tips towards self-employment and away from public sector employment, the poorer a country is likely to be.

Of course, that’s not to say that high levels of self-employment make a country poor. If anything, it’s the other way round. Countries have high levels of self-employment and because they are poor. What these figures also reflect is the size of the private corporate sectors. Take the US, for example. Although it has a relatively small public sector it is firmly on the left of the graph because it also has low self-employment. That is because much of its employment is provided by medium and large firms. It is not a small business country.

For countries on the right of the chart, like Greece and Italy, while their public employment is higher than that of the US, they also have high self-employment because their corporate sectors are weak. As the WSJ said, southern Europe’s problem is that it has too many small firms and not enough large ones. Southern Europe’s firms don’t create enough jobs so, as its public sectors retrench, self-employment takes up the slack.

A lack of large-scale employers, either in the public or corporate sectors, is reflected in productivity levels. Again, the countries on the right hand side of the graph have lower productivity levels than those on the left. Micro-businesses just don’t have the resources to invest either in technology or human capital. The consequences of having an economy dominated by the self-employed are therefore low productivity and low skills.

Slef Empb Pub Sec Productivity

Since 2011, the UK has shifted to the right of this graph. According to research by Morgan Stanley, Britain’s increase in self-employment has been greater than that of most other OECD countries.

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As this ONS chart shows, private and public sector jobs lost during the recession have not been replaced. The corporate sector has not created enough new jobs, so self-employment has filled the gap.

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This fall in public and corporate employment and the corresponding rise in self-employment has the UK sliding down that sloping line on the scattergrams. It takes us to the right, getting further away from the rich countries and closer to the poor ones.

Every time I write something like this, some self-employed people seem to take it very personally, as though I’m criticising their decision to go self-employed. They are missing the point. It’s not my business to criticise anybody’s career choice but, more importantly, I’m not saying that any of this is the fault of self-employed people. The rise in self-employment is a symptom of a weak economy just as it is everywhere else in the world. People are starting businesses because there are so few jobs available, and who can blame them. The problem is, though, that this trend takes us very much towards what Peter Cheese called the low road, that of low per capita GDP, low productivity and low wages.

Countries with very high levels of self-employment tend to be basket cases. The more the numbers of self-employed exceed the numbers in the public sector, the more basket casey they tend to be. Some people might be celebrating the tipping point when self-employment exceeds public sector employment. If you look at what that tips us towards, though, I don’t see much to cheer about.

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Waiting in vain for the rebound

Around the time of the budget, I heard quite a lot of talk about the economy returning to its pre-crisis level this year. If the OBR’s forecasts are right, growth in 2014 should see the economy making up the GDP lost in 2008 and 2009.

But that is about the only sense in which the economy could be said to be getting ‘back to normal’. The UK has more people now than it did in 2007 so, as the ONS reported yesterday, GDP might be getting close to where it was before the recession but per capita GDP still has a long way to go.

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The OBR reckons it will be 2017 before pre-recession per-capita GDP is restored. (See page 40 of the Economic and fiscal outlook.)

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Even this may be an unduly optimistic way of looking at things though. After previous recessions the economy has not only restored lost GDP. Eventually, it has returned GDP to the level it would have been at had growth stayed on trend.

The UK economy has grown at an average of 2.6 percent since 1948. After each recession, a post-recession boom has compensated to the extent that the 2.6 growth trend has been restored. In other words, it takes the economy back to where it would have been had growth ticked along at 2.6 percent and the recession had never happened. It’s a bit like a train speeding to make up for lost time after a delay.

This chart from the Resolution Foundation shows how long it has taken for the economy to make up for lost ground and return to trend growth after each recession.

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The damage from the 1980s recession was recovered within nine years, that of the 1990s downturn was recovered within six.

According to the OBR’s growth projections, though, the GDP drop from the 2008-09 recession was so severe and the subsequent recovery will be so weak, that the economy will not get back to trend growth. Or, to put it another way, trend growth is now well below 2.6 percent.

The reason for this is that we haven’t had our usual post-recession boom. After previous recessions, growth has been well above the trend, sometimes up to 5 or 6 percent. This time, after an even deeper fall, growth is forecast to barely touch the trend.

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I have added the OBR forecasts to this ONS chart showing annual GDP growth rates.

Annual GDP growth

From these two charts, it’s easy to see what has happened. In the past, we have had small dips and then years of high growth. This time, we have had a huge crash followed by what looks like a very average recovery. According to the OBR projections, we will go back to trend growth but without the boom years that usually come after a recession.

The forecasts are being hailed as great news because the growth rates are so much better than anything we have seen in the past few years. Compared to those of previous decades, though, they are rubbish. In 2001-02, when the economy slowed down to a growth rate of 2.3 percent, there was an outbreak of pessimism. The same level of growth is a cause for celebration today. What we called a mini-recession in 2002 we are calling a recovery in 2014.

According to the OBR, the spare capacity in the UK economy will have been taken up by 2018 and the growth rate will then return to its long-term average. We will have had our post-recession bounce; 2.7 percent is as good as it’s going to get.

Of course, the OBR may be over-pessimistic this time, just as they have been over-optimistic in the past. Others think that the output gap is much higher and therefore the economy has more spare capacity for growth. However, even the most optimistic forecaster only gives us a couple of 3.3 percent growth years. That would be better than the OBR forecasts but still nowhere near what we have experienced after previous recessions.

It is starting to look as though the UK may have suffered permanent damage to its economy from the recession and that we are now into a period of lower growth. As the Resolution Foundation put it:

[T]he recovery remains muted relative to those experienced coming out the recessions of the 1980s and 1990s. Following past downturns, we have become accustomed to a period of catch-up growth, during which GDP has risen above its long-run trend, thereby closing the ‘lost ground’ created by the recession.

This time round however, output remains some 15 per cent lower than we might have expected it to be had the financial crisis never hit. And projections from the OBR and that same panel of independent forecasters suggest that we might be waiting in vain for a rebound.

With growth expected to rise more or less in line with trend for the next few years, the downturn might ultimately have created a permanent hit to UK output.

But, as they also point out, the problem of secular stagnation is not confined to the UK.

It is a phenomena experienced not just in the UK, but across a number of developed economies. The lack of inflation associated with the credit boom of the pre-crisis decade in particular supports the argument that growth would have been lower in the absence of the surge in borrowing.

It’s just possible therefore that the true trend rate of economic growth is lower than we think. In the absence of a resumption of accelerating credit growth, the reality of secular stagnation might become manifest. In that context, projections for growth of around 2.5 per cent over the forecast horizon might represent a bounce after all. Once the catch-up period fades, we might face still more sedate economic expansion.

If true, policy makers face an unenviable dilemma. Re-stoke private debt and risk generating the same problems of instability encountered during the last boom, or wean the economy off its credit addiction but face permanently lower levels of real growth.

That last paragraph reminds me of the wonderful Onion spoof where we search desperately for the next growth bubble.

The forecasts, even the most optimistic ones, suggest that the growth rates of just below 3 percent may be as good as this recovery is going to get. Some economists reckon that high growth is over for western economies anyway but, even if the post-growth claims are over-stated, it looks as though GDP will rise at a much slower rate than it has for most of the postwar period. This is, effectively, a re-definition of what we mean by a recovery. Unlike the rebounds of the past, this time growth never gets back to the postwar trend. It means that we are now into an era where normal economic growth will be lower than most of us have been used to for all of our working lives. We have built our society on the assumption that the long-term 2.6 percent growth rate would carry on well into the future. It looks like we might have to re-think that one.

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Is the state shrinking?

Almost as soon as the austerity thing started, right-ish commentators started complaining that the government was not really planning any significant spending cuts. Here’s John Redwood barely a month after the Coalition took office.

Allister Heath made a similar complaint in the Telegraph in January and again just before the budget:

If he [The Chancellor] wants to cut public spending, why is he reducing total expenditure by just 3.4 per cent between 2010-11 and 2018-19?

Going by the OBR data, I make it 3.9 percent in real terms but that might just be due to recent changes in the forecast. Over eight years, though, it doesn’t sound like a huge amount.

On the other hand, left-ish commentators tell us we are facing an unprecedented shrinking of the state.

So who’s right? Is the state shrinking or what?

That all depends what you mean by ‘shrinking’.

In terms of raw numbers, it is extremely rare for any government to reduce its spending in a single year, let alone over the course of a parliament. Certainly no government since the end of the Second World War has spent less in its last year than in its first.

When you take inflation into account, though, there have been periods of spending cuts under previous governments. In comparison, the overall total planned by George Osborne doesn’t look that much worse than some of the spending reductions we have seen in the recent past.

TME Real Terms

Source: OBR Public Finances Databank

Taking the same data relative to GDP, the cuts look steeper but they still only take public spending back to 2002 levels.

TME percent GDP
Source: OBR Public Finances Databank

At first glance, none of this looks particularly apocalyptic. Whatever measure you use, the state-shrinkage seems fairly modest, taking us back to somewhere between the early and mid-2000s, more or less undoing the Blair-Brown public spending rises but hardly a fundamental rolling back of the state. That’s what is irritating the right-ish commentators. They want more. A lot more.

But here is where the problems start. Firstly, the population isn’t the same as it was in the mid 2000s. It contains a lot more old people who receive state pensions and associated benefits. Furthermore, this ageing population makes greater demands on public services like health and social care.

Secondly, the labour market is weak. Average wages are set to remain low for the next few years. People in low pay, zero hours contracts and precarious self-employment don’t deliver much tax revenue and a lot of them rely on benefits. Over the next few years, despite modest economic growth, in-work benefits and pensions will keep up the pressure on welfare spending.

The result of this increased pressure on public finances is a shift in state spending away from public services and towards welfare and debt repayments.

The effect of this was neatly illustrated by the IFS in these two charts showing the changing composition of public spending. Look what happens to the purple and yellow lines. The purple line, Annually Managed Expenditure (AME), is mostly social security and the debt repayments, now rising as a result of running big deficits. This is set to increase at about the same rate as the economy grows. If overall public spending is flat and AME increases, the amount left for public services (DEL) must reduce.

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This chart from the OBR’s March Economic and Fiscal Outlook shows the tipping point happening this year. From now on, AME will make up the greater proportion of public spending, so public service funding must fall if the government’s deficit reduction target is to be met.

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The effects of this are clear in the next chart. In OBR-speak, public service spending splits between revenue spending (PSCE in RDEL) and capital spending (PSGI in CDEL), the darkest blue segments on the chart. Most deficit reduction comes from cuts to spending on public services and, especially, from PSCE in RDEL, which is the funding for the day-to-day running of public services. It’s only towards the end of the decade that reduced welfare payments start to make a contribution and even these projections assumes that the welfare cap is successful.

Screen Shot 2014-04-01 at 10.41.50

I’m surprised no-one has done this but couldn’t find any long-term inflation-adjusted figures for RDEL. I also couldn’t find anything showing public service spending per capita. I dug the figures out from previous OBR reports, then applied the same deflator the OBR used in its overall public spending projections.

Public Spending & Population 2009-2019

(Projected figures in blue)

Public Spending Per Capita

Sources: TME: OBR Public Finances Databank; RDEL, OBR Economic and Fiscal Outlook – Table 4.17; Population, ONS population projections.

Day to day spending graph

According to the government’s plans, then, while overall public spending reduces by 3.9 percent between 2010-11 and 2018-19, per capita day-to-day spending on public services falls by around 28 percent over the same period. Economic and demographic pressures on public finances translate what looks like a relatively modest cut into a very big one.

Within this depleted spending pot, some budgets are protected. As this OBR graph shows, if spending on health, education and international development stays more or less constant, by 2018-19 there won’t be a lot left for everything else.

Screen Shot 2014-03-27 at 19.47.26

It is unlikely that health or education spending will reduce significantly, given the pressures on both. The IFS reckons that the NHS needs a real-terms increase on 1.2 percent per year just to keep pace with demographic change. Even with its protected budget, therefore, the service is beginning to struggle.

The result of all this is some pretty big cuts to most other departments. According to the IFS, the implication of protecting health and education is that cuts to other areas of spending will need to average 36.6 percent. (See IFS Green Budget Chapter 2.) This will hit local government particularly hard.

So, is the state shrinking? Well if you look at the overall figures, it’s not shrinking by much, but the numbers for public service spending tell a different story.

Public spending cuts - 2010-11 to 2018-19

Summary Public spending

As you look into the detail of public service spending, what starts off looking like a fairly small cut gets much bigger. If these spending plans are carried through to 2019, some parts of the state will not so much shrink as disappear completely.

It will need someone with more time than me to dig out the data and work out when a government last spent as little as £3,899 per head, at today’s prices, on day-to-day public services. My guess, just looking at the IFS graphs, is that it must have been some time in the 1990s, when we had a much younger society placing less demand on services like health and social care.

Of course, these are only plans. It may be that economic growth delivers higher revenues, or the next government increases borrowing and taxes. It may be that the spending cuts won’t be as severe. That said, taxes would have to rise significantly to prevent any further cuts after 2015.

Whatever the headline figures might say, though, state provision is shrinking and is set to continue to do so until 2019. Fiscal, economic and demographic factors magnify what looks like a modest spending cut to a point where the squeeze on some parts of the public sector becomes severe. According to the government’s published plans, a 3.9 percent overall spending cut will become a 28 percent public service cut. This is the brutal arithmetic of public spending.

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The working poor and the welfare cap

The details of the government’s planned cap on welfare budgets is published in the OBR’s Economic and fiscal outlook. It’s interesting to see what’s in and what’s out.

Screen Shot 2014-03-20 at 16.30.55

The main benefits for the unemployed and, of course, pensions, are outside the cap. The big lumps inside the cap are tax credits, housing benefit for those not unemployed and disability benefits. As I said in January, any attempt to cut the benefits bill will have to hit the working poor. Pensions are protected and, despite all the rhetoric about the work-shy, the unemployed don’t account for that much of the social security costs.

It’s all very well to say you are going to cap these benefits, though. The trouble is, the forces pushing up in-work benefits haven’t gone away. A recent paper by the Resolution Foundation forecasts that, after falling slightly, the cost of housing benefit and tax credits will rise again in real-terms towards the end of the decade.

Screen Shot 2014-03-20 at 16.52.38

If average pay is likely to stay low for some years yet, and it’s not just the lefties who are worried about this, then it is hardly surprising that the need for in-work benefits is likely to remain high.

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As long as there are significant numbers of the hardworking poor, which it looks as though there will be for some time, pressure on the benefits bill won’t ease by much.

Gemma Tetlow of the IFS made an interesting comment on Thursday:

Recent experience suggests that forecasting changes can cause upwards revisions to ‘welfare in scope’ of this scale

• Example:

  • –  Between Budget 2011 and Budget 2012 economic forecast deteriorated significantly
  • –  As a result, forecast for welfare spending increased
  • –  Forecast for welfare in scope spending in 2015–16 was more than 2% higher in Budget 2012 than it had been in Budget 2011

Which is a polite way of saying that, if the country can’t create enough well-paid jobs to get people off in-work benefits, the welfare cap might have to be quietly raised.

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Public finances: The picture is largely unchanged

It’s becoming a bit of a tradition this. One day, the government proclaims the brilliance of its budget, talks up the economic forecasts and claims that ‘the plan is working’.  Then the next day, the Institute for Fiscal studies pours cold water on the whole thing.

Yes, the OBR’s forecasts for economic growth are slightly higher than those of last year, which means that unemployment and therefore benefits spending will probably be lower than they thought. That eases the pressure on government finances so much that cumulative cuts to public service spending can be reduced from 20.4 percent to…er… 19.8 percent. In other words, as Gemma Tetlow said, “the picture is largely unchanged”.

As she also points out, by the time we’ve protected health, education and overseas aid from cuts, that translates into cumulative cuts, by 2018-19, of over 35 percent for everything else. And more than half of those cuts are due in the next parliament.

That’s not all though. She reckons the chancellor’s recent giveaways have made the public finances riskier:

Permanent tax giveaways have been “paid for” by temporary revenue raisers and unspecified spending cuts.

And as her boss, Paul Johnson, said we still don’t know how George is going to do all this:

It is…a Budget which leaves us with as little sense as we had before of quite how the very large public spending cuts still in the pipeline will actually be delivered.

The problem is that, while growth looks like it is going to be better than the OBR forecast last year, it is still desperately low by the standards of previous post recession recoveries.

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Source: BBC News

Furthermore, the forecasts for later in the decade have been revised downwards. In other words, this is the growth we were going to get anyway, only we are getting it a little sooner than we thought.

None of this is likely to be enough to make much of a difference to the public finances. So the 2015 dilemma is still there, waiting for the next prime minister and chancellor.

The 2015 spending dilemmaScreen Shot 2013-12-19 at 07.42.16

But, for now, there is an election to win, so, after quietly easing up on the cuts, it’s time to give a few things away to make people happy. Let’s worry about how to pay for them some other time. The 2015 dilemma, well, that’s for 2015, isn’t it?

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