Jiggery pokery and window dressing

When you haven’t got much to put in your shop window you rearrange the goods, maybe put up some bunting. But as a customer you shouldn’t mistake that for a full stock change.

George Osborne has talked a lot about capital spending today and there will be more talk about it tomorrow in the Commons statement (and, I suspect, in briefings to newspapers tonight for their morning editions).

//

But capital spending has not been substantially altered since the Budget in March. As for the jumbo list of capital spending projects that will come tomorrow that will be allocating £100bn in money already promised over the whole five years of the next parliament to specific projects – how many of them will be new, we don’t yet know.

How many of them actually happen you might wonder about too – I’ve heard of a Labour frontbencher telling a Tory MP that his party will promptly drop HS2 to save money if it wins the election, even though it is supporting it today in a Commons debate. Anyway, all in all this looks a bit like a pre-1989 east European shop window.

One minister told me he thought the Treasury had heavily “massaged” some of the numbers in the Spending Round booklet, changing base-lines here and there, massaging down some figures to ease their allies’ discomfort and make their losses look smaller, massaging up some awkward squad ministers’ cuts to make them look worse than they were. One Cabinet minister called it “Treasury jiggery pokery” with the numbers.

It was peppered with any number of political battle-lines laid down for Labour, George Osborne hopes, to trip over:

Will they back his plan for 180 new “Free Schools” in 2015-16? I thought that was meant to be a bottom-up movement not decreed from above, but we can park that thought.

Will they back his grab on JSA payments? If you go in and out of work a few times in a year you could lose quite a few days’ benefit with the new seven day pause before the first payment.

On a different note, the reduction in the peg for social rent up-rating reduced the money coming in from rents, but reduced also the money central government pays out in housing benefit.

This is an unusually uninformative Spending Round statement, giving little of the detail in some areas where you’d like to know more, and yet taking the time to itemise spending on smartening up a bit of Belgium to mark the anniversary of Waterloo.

And we should remember as we look at this document that it is predicated on telling you what is going to happen in 2015-16, but it doesn’t include any reference to tax (apart from freezing the council tax yet again at a cost of about £500m a year).

But the IFS, amongst others, think that tax hikes are bound to be a big part of the story in 2015-16. The IFS put together a chart showing how Chancellors tend to be rather generous on tax just before an election, a little more grabby with tax in the year after (see graph 5.13).

The average of post-election tax hikes after the last six general elections is £7.5bn –  some of speculated that suggests the tax hike in the first budget after 2015 could easily be £9bn or more – equivalent to a 2p rise in the basic rate of  income tax.

George Osborne might feel comforted by the fact that all the debate seems to be on his terms – austerity – and that in recent weeks he’s looked like he might have brought Labour on to that terrain as the leader and shadow chancellor back the caps and cash limits he’s originated.

And he’s so inured people to massive cuts that a day when he announced 10 per cent cuts in many departments’ budgets – on top of previous cuts – has passed without that much comment on the central premise.

Spending announcements like this have become “the new normal” and, given they were never meant to happen again after the first four year spending announcement, he’ll feel that’s an achievement in itself.

Follow @GaryGibbonBlog on Twitter.