George Osborne has eased off on austerity, say the headlines. The targets he announced in yesterday’s budget are nowhere near as severe as the ones he came up with just before Christmas. His decision not to go for such a big surplus in 2020 has reduced the implied level of cuts to spending on public services.
Public service spending projections
The OBR reckons an absolute surplus can be achieved in 2018-19 by reducing spending on day-to-day public services to 14.3 percent of GDP instead of the 13.3 percent forecast last time. And 2019-20 looks rosy by comparison to the December figures, now that the Chancellor has changed his mind about the surplus.
So has George Osborne called time on austerity Britain?
Not really. All this does is take us back to where we were last year, before the announcements in December.
The plans announced yesterday look less severe when compared to the Autumn Statement but they are not that much different from the ones in the budget last March. To achieve these targets would still mean more cuts to public services in the next parliament than we have seen in this one and, most likely, the collapse of some public services by the end of the decade.
This is no easing of austerity. It’s just a back-peddling on the fantasy land targets the government set before Christmas.