IFS: Britain spending squeeze to be bigger than any advanced economy
Last Sunday the Telegraph featured an article on our lobbying work:
Notwithstanding the minister acknowledging there is further to go in addressing the inequality in funding between rural and urban authorities – this article makes me pessimistic about whoever wins the next election. It demonstrates how independent financial analysis indicates that we in Local Government to quote Private Fraser may well be “doomed” with the state set to become smaller in relative terms than at anytime in the last 80 years. By my reckoning that’s in the middle of the great crash of the 1930s. About time a new Keynes (in the sense of someone to redefine the economic dialectic) for the 21st century arose from the ashes – but that’s just my view. This article tells us….
Britain faces a spending squeeze larger than any advanced economy over the next five years, according to the Institute for Fiscal Studies, which warned that tax hikes were likely if the Government was to meet its target of balancing the books.
Under current plans, the UK’s fiscal consolidation over the next parliament will be largest out of 32 advanced economies, including austerity-hit Greece and Portugal.
The think-tank’s analysis also showed that spending plans set out by Labour would leave Britain’s already massive debt pile 10 percentage points larger than under a Conservative government.
George Osborne has claimed that no “major tax rises” are needed to meet its target of achieving an overall surplus of £23bn by 2020.
The IFS said 98pc of the remaining fiscal consolidation was currently planned to come from spending cuts, which the government’s official forecaster has said will take the size of the state to its lowest share of gross domestic product (GDP) in 80 years.