Significant cuts are hidden away in the Budget

Spending cuts are with us. Yes the truth always is dragged, shame-faced, out of a Labour budget the day after it’s delivered – and this time there was a real corker lurking in the statistical annex. Public spending is finally being cut, and significantly – by around £20 billion a year. Alistair Darling spoke with forked tounge when he said he’d “protect frontline public services while keeping current spending growth in real terms at an average of 0.7 per cent a year.”  This fooled Fleet Street, fooled the Tories, fooled me. But it didn’t fool Gemma Tetlow, a research economist at the IFS whose briefing I’ve just come back from. Here is the scam she unearthed.

The slowdown in spending growth from 1.1% to 0.7% was only current spending, which masked a 17% cut in what the Treasury categorises as “investment” spending (ie, roadbuilding  etc).