Today George Osborne will announce the first major cuts in government spending for at least 20 years, and perhaps the biggest cuts for a generation. The details are not yet clear but it seems likely that some budgets will be cut by at least 25%, with social security, defence, social housing and the justice system likely to see major reductions. There are also likely to be some tax increases. Regardless of the precise details, the aim is to reduce the budget deficit and put the public finances on a more sustainable footing. The hope is that this will also help to spur a ‘rebalancing’ of the economy away from public spending and financial services and towards manufacturing and industry. The aim seems admirable. But what are the chances that it will actually work?