EVERYONE KNOWS WHERE WE'RE HEADED:

It is late 2019 and an election is looming. The Conservatives scraped a majority at the last election thanks to a timely boost to the housing market provided by George Osborne, who was rewarded for snatching victory from the jaws of defeat by succeeding David Cameron as prime minister. Osborne sits impassively in the Commons as his chancellor of the exchequer uses the last autumn statement of the 2015-20 parliament to boast that the government has met its manifesto pledge of balancing the books.

So what does Britain look like in these circumstances? In terms of the size of the state, it is like the Britain of the 1930s. Public spending has fallen to below 35%, lower than the postwar low under Macmillan in the late 1950s and back to the pre-welfare-state years when Neville Chamberlain was starting a rearmament programme. Osborne is offering a return to the world of Ukip's dreams without the need to vote for Nigel Farage.

Here's what it means. Public spending on services, administration and grants by central government account for just 12.6% of national output compared to 21.2% of GDP in the last year of Gordon Brown's Labour government. Put another way, spending on public services per head is down from £5,650 to £3,880. Around 40% of that reduction in spending took place between 2010 and 2015; the other 60% came after 2015.

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