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The government has announced the first round of cuts in government spending. At just over £6bn they represent just 0.8% of total forecast state spending this year, and by themselves are insignificant to the economy as a whole.

George Osborne recently announced Tory plans to finance a £12bn reduction in National Insurance Contributions through a combination of so called ‘efficiency savings’, whilst at the same time claiming that “…not a single penny will come from the front line services that people depend on”.  If this appears to be too good to be true, that’s probably because it is. 

There's been a lot of discussion about the need for public sector cuts. Give or take the public sector employs about 5 million people. If, as is demanded, there should be public sector cuts of 10% then maybe 500,000 people will lose their jobs.