I like it when one chart demolishes two myths.

The graph below from Citi’s Michael Saunders shows how the coalition government has consistently delayed its fiscal tightening. (H/T Fraser Nelson.)

The y-axis refers to the tightening required to meet the government’s “fiscal mandate”: to balance the cyclically-adjusted (a.k.a. “structural”) current budget within five years. This means the government borrowing no more than it spends on “non-investment” activities, adjusted for the state of the economy. The bars show that since the 2010 Budget, more and more of this tightening has been pushed into the next parliament, i.e. 2015/16 and beyond.

This suggests how the chancellor has been less dogged in pursuit of “plan A” than often believed. If you were being kind you could say it was a sign of pragmatism. But it also indicates how, contrary to the Budget rhetoric about responsibility, George Osborne is funding some tax cuts with temporary revenue-raisers and unspecified spending cuts. Ironically, it is just this sort of financial short-termism that worries the more thoughtful critics of the chancellor’s pensions changes.

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