THE Chancellor stared sternly across the despatch box yesterday and told the nation there is no alternative – but don’t believe a word of it. George Osborne announced the most savage spending cuts in living memory by insisting Britain’s economic survival is in mortal peril without them – but that is simply not the case.

Don’t be fooled when the Chancellor insisted that economists and other experts are united in backing his £81bn austerity drive – because they are not.

And, most of all, resist any temptation to believe the Con-Lib Dem coalition has a clever plan to restore the estimated one million jobs that will be swept away – because the bottom drawer is bare.

The closer we got to yesterday’s moment of truth, the more convinced I became that the pain being inflicted is both unnecessary and likely to deepen Britain’s economic gloom.

To understand why it happened, think back to the tough language used by Labour before the General Election when promising cuts to halve the deficit in four years.

“Tougher and deeper” than Mrs Thatcher’s cuts, vowed Alistair Darling.

To out-tough Mr Darling, Mr Osborne needed to go further – from which political manoeuvring flowed yesterday’s mistaken plan to wipe out the entire £109bn “structural deficit” within this parliament.

In truth, there is little risk that shadowy financial traders will “do a Greece” on Britain if the cuts are far, far slower, because the markets are happily buying up our huge debts.

Mr Osborne argues the public sector is “crowding out” private firms which would simply love to invest in the North-East – which is where his clever plan is exposed as an empty boast.

Cabinet ministers speak of the “distorting influence” of high public sector salaries, which must be driven out to make regions such as this one an easier place to find cheap workers. But all the evidence suggests state spending is keeping the private sector afloat – because it is a major customer – not preventing it investing.

At the heart of this blunder is the coalition’s inability to recognise that – during an economic crash – the huge deficit is not the sickness, but the cure.

Every time you hear Messrs Cameron, Osborne or Clegg bemoan their “appalling” inheritance, remember it is the deficit that prevented hundreds of thousands more being thrown on the dole.

Wipe out the deficit now, while the world economy still teeters on the brink, and growth will disappear – along with the tax revenues needed to remove the deficit.

The Chancellor says he is freeing the “next generation” from the misery of debt. But the next generation are the young people of today – those left with little hope of a job.

THERE wasn’t much to laugh about in the Commons chamber yesterday, but it was the first time I had seen Chairman Mao’s famous “little red book” waved about.

Conservative backbencher Dan Byles had recently visited China and was convinced one passage – “thrift should be the guiding principle in government expenditure” – made the late dictator a fan of the “age of austerity”.

Mr Cameron replied: “Even Cuba is making reductions in public spending, so I think this puts the modern Labour party somewhere between China and Cuba – but I’m not quite sure where.”