To listen to the reporting of the Chancellor’s phased and rather limited spending cuts, you would think that the gates of fiscal hell opened at 12.30 p.m. on Wednesday. They are the ‘most savage cuts in our lifetime’, said an ITV reporter. The ‘fastest, deepest cuts in public spending ever mounted by a government in modern times’, declared a hyperventilating Will Hutton, a newspaper columnist and government adviser. It has been so long since Britain attempted fiscal restraint that a cut in total government spending of under 4 per cent in real terms over four years is treated like the coming of the apocalypse.
That there will be severe pain is not in question. There will be real hardship for the soldiers and public-sector workers who are laid off. But job losses will not be the main problem the British economy faces over the next few years. The overall British story now is one of steadily rising employment, with 300,000 more jobs this year.
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