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It might be described as an Autumn Statement for wishful thinkers. Admittedly, with a general election fast approaching, perhaps the medium term projections don’t matter too much. There is, however, something decidedly odd about George Osborne’s medium term fiscal and economic outlook.
First of all, the public spending cuts still to come are, on the Office for Budget Responsibility’s numbers, huge. Spending on public services as a share of gross domestic product is set to fall by considerably more over the next five years than it did over the last five years, accounting for the lion’s share of the shift from a budget deficit of 5 per cent of GDP to a surplus of around 1 per cent of GDP.
It’s a big ask given that no political party wants to do anything other than support more spending on health provision. Cuts elsewhere will be draconian.
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