The Institute for Fiscal Studies said the pledge by Theresa May at this year’s Conservative party conference to end eight years of cuts was “unlikely” to be compatible with the chancellor’s aim of balancing the nation’s books unless some tough decisions were made. The thinktank said Hammond would need to find £19bn a year by 2022-23 to meet the government’s spending commitments for health, defence and aid, and to reverse planned cuts to public spending in other areas.
The IFS said this was a “minimal definition” of ending austerity because sparing Whitehall departments and local government further retrenchment would still leave £7bn of welfare cuts in the pipeline.
Paul Johnson, the director of the IFS, said the chancellor had a big choice to make.
The IFS said this was a “minimal definition” of ending austerity because sparing Whitehall departments and local government further retrenchment would still leave £7bn of welfare cuts in the pipeline.
Paul Johnson, the director of the IFS, said the chancellor had a big choice to make.
“He could end austerity, as the prime minister has suggested. But even a limited definition of what that might mean would imply spending £19bn a year more than currently planned by the end of the parliament. An increase of that size is highly unlikely to be compatible with his desire to get the deficit down towards zero. Alternatively, the chancellor could stick to his guns on the deficit and leave many public services to struggle under the strain of a decade and more of cuts. He could reconcile these demands by raising taxes, and in principle there are plenty of good options, but the overall tax burden is already high by UK historical standards and he could be constrained by the lack of a parliamentary majority. This is going to be the toughest of circles to square.”
No comments:
Post a Comment