Chancellor's book of doom

George Osborne: endless age of austerity

EXTRACT: Looking at the autumn statement in the light of the OBR report, BBC commentator Norman Smith described it as an “utterly terrifying” book of doom - a “hulking great mountain of pain” that will take Britain “back to the land of Road to Wigan Pier” (a reference, of course, to George Orwell’s 1937 depiction of the extreme economic hardship endured by the working class in Lancashire and Yorkshire). Osborne immediately hit back, accusing the BBC and other critics of being “totally hyperbolic”. Unfortunately for the chancellor, however, the Institute for Fiscal Studies added weight to Smith’s fears - pointing out that only £35 billion of cuts had already happened, meaning there was at least £55 billion yet to come. In which case, seeing that education, health and international aid is ring-fenced, many government departments could suffer budget reductions amounting to more than 40% - “colossal” cuts that could force a “fundamental re-imagining” of the state, to use the words of the IFS.

Whether cuts of such a magnitude are sustainable, politically or economically, is a different question. But if you are a teacher, nurse, local government worker or civil servant, the chances are that your living standards will keep going down. Osborne, after all, plans to slice billions off the tax credits bill paid as a top-up to five million families on low incomes - which could reduce the income of a working-poor family with one child by £350 a year, while a lone parent with two children could see a £500 drop (the precise picture is complicated by the phasing out of tax credits and their replacement by universal credit).

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