All the talk about the ‘colossal’ cuts to come if the Tories win re-election has been predicated on the assumption that the Tories are committed to running a £23 billion surplus in 2019/20.
But this assumption is wrong. As David Gauke told Andrew Neil just now, ‘At the moment the OBR predicts that we will have a surplus of £23 billion, but we’re not making a commitment to the British people, that’s what the number will be in 2019.’
Instead, I understand — after extensive conversations with members of the Chancellor’s circle — that the Tories intend to start increasing spending in line with inflation once the Budget is back in surplus. Combine this with the fact that, as one puts it, ‘We want more cuts in welfare than spending cuts from departments’ and the efficiency savings they can make — Whitehall sources reckon they can save £4 billion on IT contracts alone in the next parliament, and the cuts required from departments begin to look a lot more realistic.
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