George Osborne
George Osborne delivers his Spending Review and Autumn Statement speech to the House BBC

Back in July, Chancellor George Osborne's post-election Budget was widely touted by the media as a centrist triumph. This is testament to just how unobservant and hive-minded political journalism can be at times. For all the obsequious summer spin around the chancellor's programme being an attempt to reclaim the 'one-nation' territory bequeathed to him by his political opponents, underneath the centrist verbiage was a bombshell in the form of planned £4.4 billion cuts to working tax credits that would have resulted in some families losing as much as £1,300 a year.

It ultimately took the opposition of the House of Lords, the Conservative backbenches and the Tory press – all ramparts of the establishment – to bring about today's U-turn on Osborne's part. The chancellor's mistake was to stray from his usual attacks on the 'shirkers' of right-wing caricature - curtains resolutely closed at the crack of midday – and to go after the much-lauded 'hard working people' beloved by just about everyone in Westminster and Fleet Street. The clue to working tax credits is after all in the name – this is the state topping up the wages of those who are not paid sufficient sums to live on, despite holding down jobs.

The lesson from Osborne's last big 'fiscal event' is to always look beyond the following day's headlines and to try to unpack the detail. Or as Shadow Chancellor John McDonnell accurately pointed out today in his response to today's Autumn Statement, "The louder the cheers on the day the greater the disappointment come the weekend."

The chancellor's screeching u-turn on tax credits will, I imagine, occupy tomorrow's front pages. However what ought to be remembered is that Osborne is still intent on making £12bn in cuts to welfare – he has simply booted the announcement of where these cuts will fall further into this parliament. Osborne is also holding firm on his planned surplus of £10bn by 2020, meaning there will be no conceivable let-up in the scale of the cuts facing government departments.

Along with the tax credit U-turn, the other rabbit Osborne pulled out of his hat today was a promise of no further police cuts. The chancellor has wisely concluded that such cuts would look reckless at a time of heightened security after the Paris attacks.

Besides these headline-grabbing announcements, the chancellor also pledged that:

  • Education funding will be protected in real terms
  • There will be no further cuts to police budgets
  • The housing budget will be doubled with the aim of building 400,000 new homes
  • Capital spending on transport will increase by 50 per cent to £61bn
  • Small business rate relief is to be extended for another year
  • Public spending will rise to £821bn in 2019/20
  • The NHS budget will rise from £101bn to £312bn by 2020
  • There will be a £10bn increase in education funding and 30 free hours of childcare for parents working more than 16 hours a week.

As to how the chancellor plans to fund these things, Paul Johnson of the Institute for Fiscal Studies (IFS) told the BBC this afternoon that George Osborne had "got lucky" with a rise in tax revenues and a slight decrease in the debt interest Britain is paying. The chancellor also hopes to make up any shortfall with several progressive – yes, you did read that correctly – revenue raising measures, such as an apprenticeship levy (a £3bn tax on big business), a three per cent stamp duty for buy-to-let landlords and higher stamp duty for those buying second homes.

But this is Osborne with a beady eye on the future prime ministerial vacancy rather than a chancellor who has undergone a Damascene conversion to centrist economics.

As if to emphasise this point, during his speech the chancellor made several misleading claims. He said that inequality hadn't risen in recent times – but only because middle incomes have remained static. Similarly, child poverty hasn't fallen, as the chancellor claimed in his speech – instead the way child poverty is measured has simply been redefined.

This is success only in the sense that a sick person is cured because they have sat up in bed.

There were also a number of less cheering developments on the horizon which, unsurprisingly, the chancellor failed to mention. The October borrowing figures were the worst since 2009 due to lower tax receipts. The Office for Budget Responsibility (OBR) has also thrown cold water on Osborne's central thesis that the British economy is strong because (rather than in spite) of austerity. The OBR said yesterday that slightly higher growth in 2016 and 2017 was "mainly" due to an easing of the pace of austerity.

Yet for all the left might wish to capitalise on these potential chinks in the chancellor's armour, the anti-austerity rhetoric of 2010/11 is hanging like an albatross around its neck. For better or worse, the public believes that hitherto dire warnings about austerity have not come to pass. Yes, things in the last Parliament were bad, but I suspect not as bad for most people as vocal sections of the left were prophesising back in 2010.

Against this backdrop, even a unified and credible Labour Party would struggle to land many blows on the chancellor. Thus the danger for Labour - riven already by division and perceived lack of credibility - is that similar warnings simply wash over the heads of a public that has grown tired of left-wing histrionics.