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For all the ink and bile being spilt over Osborne’s plans, you’d think the country was facing a choice between massive cuts or no cuts at all. But, with the sole exception of the Greens, there is not a single party in Parliament that believes we can avoid a significant shrinkage in public spending. Today’s highly significant OBR report will only strengthen the political consensus on this.

For all the ink and bile being spilt over Osborne’s plans, you’d think the country was facing a choice between massive cuts or no cuts at all. But, with the sole exception of the Greens, there is not a single party in Parliament that believes we can avoid a significant shrinkage in public spending. Today’s highly significant OBR report will only strengthen the political consensus on this.

 The Party most likely to inherit the red boxes has a plan that would have seen a Labour Government making cuts of around £50 billion by the end of the Parliament. That would have hurt. A lot.

 And even if that is a full £30 billion less than the current plans, there would still have been a major chunk of deficit left to address after 2015. So further cuts would have been necessary.   

 This is not to say that Labour's key point about the pace of cuts is unimportant. Go too fast and growth could be damaged making it even more difficult to clear the deficit.  But that does not mean that going slower is a recipe for avoiding major cuts.

 Like the anti-cuts campaigners and unions who claim higher tax alone could clear the deficit, Labour's argument always runs up against the brutal logic of a large structural deficit: even if the economy is operating at full capacity and pumping out all the tax revenues it reasonably could, there would still be a big IOU from HMG sitting in the wallets of investors. 

 Many may conclude, “plus ca change – exaggeration in politics is nothing new”.  But the focus on the pace of cuts and even the very necessity of cuts by politicians, unions and campaigners means pressing questions are being ignored.

 How, for example, should government policy compensate for the economic impact of cuts? The Office for Budget Responsibility is clear that jobs will be lost and growth will be slowed. Optimists at the CBI and in Government claim this hit can be absorbed but given the reliability of economic forecasts since the Crash, such assurances cannot be taken at face value. 

  So where is the heated debate over the appropriate growth strategy? Where are the detailed analyses of the Government's rather limited Plan for Growth? Barely audible above the shouting match over the principle and pace of cuts.  It is telling that over a year after the Emergency Budget, the rather obvious notion that unavoidable fiscal contraction needs the counterweight of an ambitiously pro-active growth plan has yet to be developed meaningfully by any major political actor.

 Equally muted is the question of how we should respond to the inevitable shrinkage of public services. What happens when basic waste management, support for victims of domestic violence, or care for the disabled begins to fade?  Such concerns are currently little more than rhetorical grenades to be flung against the gates of Downing Street. A really meaningful discussion about what citizens, local authorities, and civil society can do to plug the emerging public services gap has not even begun. 

 The Government’s own airy solution of the Big Society has been ripped to shreds in the cuts melee when it could have been the starting point for a debate that genuinely placed public service users first. And this is despite the fact that practically minded sorts in RSA initiatives such as the 2020 Public Services Hub and the Citizen Power Peterborough project are working hard on the ground to find ways to keep public service alive in a context of unavoidable austerity.

 Maybe debate will move on when it finally dawns that the cuts have not been stopped and the time has arrived to think about how we deal with the consequences. Maybe today’s OBR report will concentrate minds more clearly on the unpleasant longer term fiscal pressures. But given big cuts are inevitable, why not start the debate now?

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