Here is the full verdict from the Institute of Fiscal Studies:
This appears to be the crux of it.
The Conservatives claim that the spending cuts can, in effect, be rendered painless by efficiency savings that they say their advisers have identified. Whether or not that is true, using the bulk of these spending cuts to finance the NI cut means that they are not available to contribute to the task of reducing government borrowing that the Conservatives have set such store by. Reducing the deficit more quickly than the Government plans to will therefore require even greater cuts to public services spending, or to greater reliance on welfare cuts or tax increases that might be as economically costly as the NI increases they are seeking to mitigate.
Here are some other thoughts from elsewhere:
Ben Brogan thinks it’s great politics although he is concerned about the IFS response
Dan Roberts at the Guardian thinks Osborne has undermined his own “broke Britain” theme and risks looking inconsistent
John Redwood says it’s feasible to cut 10 per cent from many departments without damaging services
Nick Robinson says cutting taxes, cutting the deficit and not cutting public services is a tricky act to pull off
and from the City
Terry Smith, chief executive of Tullet Prebon, the inter-broker dealers, warns on the radio:
“Whilst the cut is probably the right direction, it’s the credibility of the spending cuts that have to go alongside it which is really in question here, and I don’t think anyone will be regarded as credible until they ‘fess up’ to the terrible truth that some of the services will have to go, in terms of jobs and projects.”