This is not the end of ‘austerity’ – the IFS verdict on George Osborne’s Autumn Statement

This is not the end of ‘austerity’. A swathe of departments will see real terms cuts. On the other hand there is no question that the cuts will be less severe than implied in July. The gap with what one might have expected based on the Conservative manifesto is substantially greater.

How has Mr Osborne done that whilst keeping to his surplus target in 2019-20? He has banked some changes in forecasts for lower debt interest payments and higher tax revenues. That was lucky. By adding some tax increases he has made some of his own luck.

He’s going to need his luck to hold out. He has set himself a completely inflexible fiscal target – to have a surplus in 2019-20. The forecasts will change again, and by a lot more than they have over the past few months. If he is unlucky – and that’s almost a 50-50 shot – he will have either to revisit these spending decisions, raise taxes, or abandon the target.