Jeremy Hunt has taken a gamble. No doubt, pain is guaranteed for millions of people over the coming years. The tax burden is rising ever-higher as middle earners are dragged into higher rates of tax, while living standards are set to suffer the greatest fall on record. But despite the rhetoric and pre-statement pitch rolling, spending cuts are not scheduled until 2025.
The Chancellor’s punt is that cuts, or at least not all of them, will prove necessary. Perhaps the recession will be milder than predicted, or tax revenues stronger. Energy prices could undershoot their forecasts. The markets appear reasonably relaxed, such is the benefit of providing an Office for Budget Responsibility forecast and adopting a posture of fiscal rectitude.
