It suited Osborne to pretend to his supporters that he was applying austerity. It suited Milibrain to pretend to his supporters that we were getting austerity. They were both lying, but it suited the Guardian and the BBC to pretend they were telling the truth.
It's just another variation on "polispeak", where "cut" actually means "reduced increase".
Didn't continue spending like drunken ~~sailors~~ politicians == austerity. Right.
It suited Osborne to pretend to his supporters that he was applying austerity. It suited Milibrain to pretend to his supporters that we were getting austerity. They were both lying, but it suited the Guardian and the BBC to pretend they were telling the truth.