George Osborne's Spending Review in ten graphs

Politically, the story was George Osborne’s (wise) retreat on tax credit cuts. Economically, here’s the upshot:-

1. The end of austerity: state spending is shooting up.

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Everyone expected a hatchet day; instead, this was a tax-and-spend budget. Total state spending is now on the rise, and will be for the foreseeable future. The above graph shows the new spending plans (in red) and old (in blue). In his March Budget, the Chancellor was talking about a £30bn cut for public services; this fell to £18bn in his July budget and today it’s £10bn. How does he manage such a retreat, while keeping to his target of a £10bn surplus in 2020?

2. Osborne’s new tax raid.

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For example, there will be a new tax to pay for social care – but levied by councils. An £11bn tax on companies, called an ‘apprenticeship levy’. Stamp duty hiked up 3pc for buy-to-let landlords and second home buyers. Such taxes will allow Osborne to say that he’ll still run a £10bn surplus in 2020/21.