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Tuesday, December 04, 2012 

Still two and a half years to go.

Here's one to delight those glass half full/glass half empty types: tomorrow is the official half-way point for the coalition, as noted by dearest Pollyanna.  Either we've only got another two and a half years to go, or we've still got another two and a half years to go.  As a glass half empty person, it's also worth noting that these 30 months will see the brunt of the cuts: next April sees the introduction of the benefit cap and further alterations to housing benefit, while October will bring the new, guaranteed to work perfectly universal credit.  The timetable was based around the assumption that the economy would be back to stable growth by this point, making the cuts less painful.  So much for that.

At least the coalition's spinning of tomorrow's autumn statement on the budget has been perfectly transparent.  After the disagreements that led to almost all of the budget being leaked, contributing to the shambles that followed, this time round they've decided to announce the main points in advance themselves and so avoid the potential for another disaster.  Sunday saw George Osborne ensconced on the cosy Andrew Marr studio sofa, all but accepting he would miss the target set in his first emergency budget to bring debt down as a proportion of GDP by 2015, having already postponed eliminating the structural deficit until 2017.  Today Dave 'n' Nick went off to a school, presumably one of those not run by the barmy lefties who so vex Michael Gove, where the pair announced that Plan A was also being modified, albeit slightly.  Rather than go to the markets where they can borrow at record low levels, all government departments other than those protected are to be raided once again to fund a £5bn increase in capital spending projects.

Considering the fetish made by Osborne of not deviating from his spectacularly successful economic plan by as much as an inch, any u-turn on investing is welcome.  The change is though massively tempered, firstly by how £1bn of the £5bn will be allocated to a school building programme, when there was a perfectly adequate one already in operation when the coalition came to power which Michael Gove almost immediately cut to the bone, and secondly by how the money has to come from yet more cuts. 

Then again, how could the Tories possibly do anything other than rob Peter to pay Paul?  Cameron's main line of attack on Ed Miliband and Labour has been that all they want to do is borrow more.  It doesn't matter that tomorrow Osborne will admit the government is having to borrow more due to the lack of growth, or how numerous experts have called for a loosening of austerity, should they do exactly what Labour urged the Tories fear they would lose all credibility.  They're probably right, but that's their own damn fault.  If the coalition truly is governing in the national interest as they continue to say, Osborne would admit the current economic situation isn't the fault of everything other than his policies, and row back and introduce something along the lines of Jonathan Portes's plan for growth

Instead, we're likely to be served up something which ends up bringing down debt as a proportion of GDP at around the same point as Alistair Darling proposed, the plan Osborne and friends continue to maintain would have resulted in our borrowing costs rising to the levels Greece and Spain are having to pay.  The wonder isn't that the polls show Labour opening up a lengthening lead over the Tories (the Lib Dems meanwhile are now neck-and-neck or behind UKIP in most polls), it's that the Tories are still ahead on who would best run the economy.  Perhaps it's simply down to mishearing or a typo: all run needs is an I in it and the public are dead right.

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