Westminster Blog

George Osborne, left, and Danny Alexander

While Tories tear themselves apart over gay marriage, another row is creeping up on the government which could be much more long-term and damaging.

Without creating too much of a stir (yet), George Osborne and Danny Alexander are busy in the Treasury, planning their next round of spending cuts. They have told ministers that they intend to keep cutting at the same rate and in the same proportions as has been done so far, which means returning for further savings to departments that have already been hit heavily.

Theresa May, Chris Grayling, Philip Hammond and Vince Cable all realised this would place them at the front of the axeman’s queue, and urged Osborne to rethink his strategy at a stormy cabinet meeting a few weeks’ ago.

It will be the defence cuts that will create the biggest row, with Tory MPs having threatened Cameron with a major backlash if he cuts the MoD further. On FT projections, Osborne and Alexander will have to make cuts of £700m, from a baseline set by last year’s autumn statement. Compare that with defence chiefs’ wish for a real-terms freeze, starting from a higher baseline, and you realise how far apart the parties will start in any negotiations.

But some of the most interesting figures come when we see what the total effect of eight years of austerity will have been by the end of 2018. The part of DCLG that does not go to local government, for example, will have been cut by nearly three quarters in real terms. The foreign office will have lost two thirds of its budget. Ten departments will have been reduced by a third.

Our data is here for you to see what you can make of it – but remember, this is just the starting point for negotiations. This is all within the chancellor’s remit to play around with.

* These will actually be calculated by the Barnett Formula