Let’s face it, there are still £12bn in cuts to welfare spending to come in this parliament. This remains not only unfair, but unnecessary.

As expected, Osborne’s economically illiterate goal of generating a budget surplus by 2020 has provided cover for another round of cuts and sell-offs, reducing the size of the state still further to 36.5%. But what question is 36.5% the answer to? The question the government should be asking is what we want the state to do. From that starting point it should then try to establish what size and what form is required for the state to deliver this objective.

Instead, the chancellor is relentlessly pushing his own agenda. With huge cuts in central departmental budgets, a garage sale of government assets and an ongoing threat to organisations such as the BBC, it is not clear what strategic capacity the state will have left once all the cuts have fallen.

Osborne claims to act in the interests of Britain’s long-term economic security. But rather than fixing the roof when the sun is shining, he is introducing structural weaknesses in the economy that are likely to cause serious subsidence in the years ahead.

Even the IMF has woken up to the fact that cuts do not cause growth. Growth is determined by strategic spending on areas that increase productivity, which in the UK is still below the OECD average. This includes investing in training, education, research and development, and state-of-the-art infrastructure. So while there has been a boost to some infrastructure spending, the lack of vision on what kind of economy we need for sustainable long-term growth means there has been little discussion about the direction of growth.

The key issue is not whether a country runs a modest deficit, but what it is actually spending the money on.

Source: Autumn statement: Osborne isn’t fixing the roof, he’s eroding the foundations | Mariana Mazzucato | Comment is free | The Guardian

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