Given the rollercoaster profile for government spending inherited from the coalition, there is clear scope for the Government to smooth the fiscal consolidation more evenly over this parliament. Admittedly, the Conservatives limited their room for manoeuvre by undertaking restrictive fiscal pledges before the election. But at the very least, they could shift some of the big cuts planned by the coalition for 2016/17 and 2017/18 into 2018/19 (when real spending is projected to be flat).
After all, delaying some of the austerity might not be a bad idea given that it may not actually ever have to be implemented. If we are right that the structural budget position is not as bad as the OBR estimates, the fiscal squeeze does not need to be as severe as planned.
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