The sheer madness of Gordon’s state of denial became clear yesterday.  He stood there at PMQs and claimed spending would grow 0%.  He has set himself a dividing line alright, it is the line between economic reality and economic fantasy.  He is on the wrong side of that dividing line.

Andrew Grice reports that the rest of the Cabinet, including the Chancellor, wants him to take a reality check.  They have agreed to admit there will be some cuts out of necessity, but to argue that the Tories will cut more, this was the position that Mandelson argued for originally.  At PMQs Cameron and Clegg were united against Brown – the LibDem leader accused him of “living in complete denial”.  It appears the Cabinet agrees.  It remains to be seen whether or not they can get the Prime Mentalist to change his “no cuts” tune.

If you wade through the numbers in the Treasury’s recently released Public Expenditure Statistical Analyses 2009 (page 83), you can see the Tories are right about the government’s own plans to cut spending on services in real terms in 15 out of 25 departments in 2011.  Gordon’s lying has lost him the argument about cuts, the reality is it that it is a question about the degree and timing of cuts.