The point of Osborne’s scalpel

To govern is to choose. For nine years, Gordon Brown delayed choosing between higher taxes or lower spending, which is why the last time he balanced the government’s books was 2001–02. Since then, we have been building up to the spending cuts announced this week. No matter who won the election, there would have been cuts. Labour’s figures suggested they intended to cut departmental budgets by only marginally less than George Osborne has done. There is no great ideological divide between the parties on the total amount of cuts, so let us dispense with any pretence to the contrary.

The Chancellor deserves credit on several fronts. He has stuck to the pace of cuts laid out in the Budget, and limited the impact on defence and education. He has done his best to protect infrastructure — vital for a business recovery — and lowered his axe at the burgeoning public-sector payroll. The newspaper headlines may speak of 500,000 public-sector job cuts over the four years, but the same unreported forecasts suggest that 1.5 million new jobs will be created over the same period. The purpose of the cuts is to create more jobs, and better-paid jobs.

Osborne was also right to point out that the amount paid in debt interest — £63 billion — is lower as a result of his being more ambitious in his spending reforms. This is a tangible benefit of austerity. Confidence in Britain’s economic future has lowered the cost of government borrowing, helping to secure the supply of cheap credit on which the tentative economic recovery depends. And it is working. The economy is creating jobs faster than the government will cut jobs: the result is more jobs, less poverty and quicker recovery. This, again, is the purpose of cuts.