William Gladstone, it is said, was at the Treasury from 1860 to 1930. As they gaze across Horse Guards Parade, some in Labour ask whether George Osborne still is today. The £5bn welfare cuts announced in advance of Rachel Reeves’s Spring Statement on Wednesday were just a preview of the flinty decisions to come.
Ahead of this June’s Spending Review, unprotected departments – such as the Home Office, justice, transport and local government – have been instructed by the Treasury to model two scenarios. Under the first, they would receive a “flat cash” settlement – equating to a 5.8 per cent real-terms cut. Under the second, spending would be cut by 2 per cent in cash terms – or 11.3 per cent in real terms. “It’s a choice between bad and terrible,” one government source said, likening the spending pressures to spreading jam across a widening piece of toast. This, an increasing number inside Labour declare, is an “austerity government”.
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