With fingers crossed: The Chancellor is frontloading the worst of his cuts

As a very political sort of Chancellor of the Exchequer, George Osborne’s decision to bring forward some £3bn of spending cuts to this financial year should be seen for its political rather than its fiscal significance. Though it still counts as “real money”, this £3bn has to be placed in the context of a total public spend of about £714bn. However, the chances are that, when Mr Osborne comes to present his Budget next month, it will come from a politically sensitive area, probably social security, and if that is the case then it is better to get the pain over with sooner rather than later – before the European referendum and the next general election hove into view.

Timing also explains why Mr Osborne would like to sell the remaining government stake in the Royal Mail – worth about £1.5bn – sooner rather than later. Having been notoriously under-priced when Vince Cable sold the first tranche of shares two years ago, at £3.30 each, the shares now stand at a relatively healthy £5 or so, and the Treasury judges this is a propitious moment to cash in. There would certainly seem to be more downside than upside on what has been a useful earner for its first wave of private investors – though this sale seems destined to be confined to big City institutions rather than “Sid”.

The bigger picture, and a worrying one, is that, in its determination to shrink the state, the Treasury is set to repeat the mistakes of the last parliament – and cut too much, too fast. That will not only be a problem for the most vulnerable in society, inevitably hit hard by an assault on the welfare state, but for the wider economy if it inhibits what is developing into a rather uncertain recovery. And if that is the case then the public finances will worsen before they improve. Even the most political of Chancellors ought to be alert to that danger.