Last week it was £6.5bn cuts announced by Danny Alexander (the former PR chief for the Cairngorms), yesterday another tranche of £1.5bn cuts from him, pepped up by Michael Gove’s scrapping 715 new school-building schemes (including 8 in my own constituency) in order to make way for his so-called ‘free schools’ and academies.    This is just one tiny part of the additional Tory public spending cuts of £32bn a year by 2014-5 which will be brought about by slashing Government departmental budgets by a zany 25%.

Some of this is artfully concealed, receiving only a passing casual mention in the Budget.   The starkest example of this is the enormous cuts to welfare hidden in the innocuous phrase announcing the switch from RPI to CPI (the consumer price index that excludes housing costs).   What this actually means in practice is that the annual uprating of all benefits on which the unemployed, pensioners, disabled and incapacitated, and single parents depend will be £6bn a year less than at present, cutting a huge swath through their standard of living and accounting for more than half the total planned cuts in welfare of £11bn a year.

But it’s not just welfare that’s being chopped.   The halving of the school-building programme will seriously cut construction industry work and remove jobs from building workers.   Altogether the building industry depends for 40% of its work on public sector contracts.   As a result of the schools cutbacks and the nadir in housebuilding (at its lowest point since 1923), up to half a million building workers could lose their jobs.   The Treasury Red Book itself admits that public sector net investment as a whole will more than halve from 49% to just 21% over the current 5-year period.

So with this veritable vortex of cuts, where is the OBR’s pie-in-the-sky 2.5m increase in jobs to come from?   Despite Tory apologists crowing that this is an independent forecast, it’s nothing of the kind – its head, Sir Alan Budd, was previously a Tory economic adviser and the OBR is located next door to the Treasury.   So what does the OBR predict for investment?   After falling by 20% in 2009, the OBR expects investment to pick up by 1.3% this year and then by a highly unlikely 8% in 2011 followed by a fantasy 10% on average between 2012 and 2015.

The key question is: when public investment is being cut drastically by the Government which impacts severely on private business, why should the private sector invest when household consumption is falling, the banks are not lending, and when export prospects in the euro to which 60% of our exports normally go are being scaled back by austerity?    Checkmate.

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