Several UK newspapers today trumpet the Chancellor's Autumn Statement yesterday as heralding the end of austerity. Nothing could be further from the truth.
Chart 4.10 in the Office for Budget Responsibility's (OBR) Economic and Fiscal Outlook shows the size of the state in Britain continuing to shrink dramatically.
From around 46% in 2010-11 total public spending as a percentage of GDP is projected to fall to 36.4% in 2020-21. This is as low as it was in 2000-01 after the long decline from around 48% after eighteen years of Conservative government - the 1997 Labour government initially adopted Conservative spending aggregate plans in an attempt to gain fiscal credibility. Prior to 200-01 the last time total public spending amounted to around 36% of GDP was in the mid 1950s.
The Chancellor may have done a U-turn on his plans to cut tax credits but he still hopes to cut the size of the British state by 20% in ten years, twice as fast as the paring back of the state under the Thatcher/Major governments.