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Why Osborne may decide to cut yet again

Since his hard-earned skiing break in the exclusive Klostersresort, George “Don’t call me Gideon” Osborne has doubtless been knuckling down to findmore ways to erode our living standards in time for his next Budget statementon 23 March.

He is fortunate that advice from all quarters is inabundance.

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Yesterday, the Institute for Fiscal Studies, seen as a tadpinko by some Tories, pointed out that the chancellor may need to borrow lessin the next financial year, but at the same time urged caution.

By coincidence, Conservative Home carried an article by RyanBourne of the Centre for Policy Studies calling for “more draconian” publicspending cuts.

In a rather bizarre endorsement of masochism, the articlethunders: “More companies in the UK should be failing”. It adds that publicspending cuts are not happening quickly enough.

Reading like an charter for economic anarchy, it appears to be chanting “Bring on the bankrupts!”, “Bust, not boom!” and so on.

The call for further cuts will appeal to many on theConservative right, already fearing that the Liberal Democrat elements in thegovernment are holding back progress – or should that be regress?

London mayor Boris Johnson has added his voice by callingfor tax cuts, conveniently ignoring the fact that low earners will behelped by the gradual raising of the personal allowance to £10,000 by May 2015. But he didn’t really mean them, did he?

Pressure does appear to be mounting on Osborne to prove that he can operate shorn of Lib Dem influence, perhaps by reducingthe higher rate tax or slashing public spending or both.

If Osborne is confident that the economy will pick up, thetemptation might be to press further ahead with the “more draconian” publicspending cuts feted by the Tory right, albeit risking industrial or even civilstrife.

But i he is persuaded to cut, cut and cut again, he can almost certainly expect to return to Klostersnext year looking like the Eddie the Eagle of politics as he falls off the top of his mountain.

Picture: Rex Features

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