This past week, both the Prime Minister and the Chancellor have taken to the airwaves to boast that the coalition government’s ‘tough but necessary’ action in tackling the deficit has pulled it out of the danger-zone in which it lay when they took office, at the mercy of the bond and currency markets who would not tolerate such levels of government borrowing any longer. On the Today programme on Monday, George Osborne claimed that as a result, Britain would be spared the fate of Greece and Ireland.

That comparison with Ireland followed the increasingly desperate news that the former Celtic Tiger is sinking further and further into the quicksand of a deflationary spiral; the more the Tiger lashes out, the further it sinks: further cuts in public spending will be undertaken in order to chase the tail of a deficit that is running out of control precisely because cutting government expenditure during a recession creates a ‘death spiral’, as the economist David Blanchflower calls it, in which the cuts put people out of work, which lowers aggregate demand, which lowers growth, which lowers tax revenues, which widens the deficit, which results in more cuts and so on. Ireland is clearly in that death spiral right now, so it is not surprising that the Chancellor tried to contrast its fate with that of the UK.

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So now we know the truth: the £6bn ‘efficiency savings’ the Tories promised before the election were calculated on the back of an envelope. It was clearly cooked up in the two weeks between the Budget and the announcement of the election, with the sole aim of giving the Tories some tactical room to attack Labour’s proposed rise in National Insurance contributions (aka ‘jobs tax’), whilst at the same time delivering a sleight of hand that would enable them to claim they were still serious about cutting the deficit without adverse consequences to ‘frontline’ public spending. Time and again during the leaders’ debates, when Gordon Brown accused the Tories of risking the recovery by cutting public expenditure this year, David Cameron responded by talking about ‘waste’ not ‘cuts’.

Well, the smoke has lifted and the lie is exposed. Whilst the Tories suggested that £1bn of savings could be found from efficiencies in government IT projects, the Treasury confirmed this week that the real figure would be £95 million – less than 10% of the figure claimed. Similarly the Tories suggested that £1bn of savings could be found by freezing civil service recruitment; the real figure will be £120 million, just over 10% of the saving claimed.

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