FOR five years George Osborne, the chancellor of the exchequer, has focused on fixing Britain’s public finances. Since 2010, when the Conservative-Liberal Democrat coalition took office, he has cut the budget deficit in half, from 10% of GDP to 5% last year. But now that the Tories govern alone, Mr Osborne is ramping up his ambitions. When on July 8th he delivered the first purely Conservative budget since 1996, he set out a new plan to finish the book-balancing job. On the way, he hopes to reshape Britain’s welfare state.
In March, in the last budget before the election, Mr Osborne promised to steer the public finances to surplus by 2018-19. His plan for doing so required very steep cuts to government departments for three years. That looked unrealistic; outside a ring-fence protecting health, international aid and schools, budgets had already been slashed by an average of 20%. The plan was also strange: having inflicted harsh cuts, Mr Osborne would then reverse many of them the next year.
The new budget restored some sanity. Mr Osborne, who has been more flexible than his rhetoric promised, delayed the return to surplus by a year, and...Continue reading
via Brian Rushton, Fix, then fiddle
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