Austerity to last until 2020: expect hard times for a decade, say think tanks
'We are still as far away from the target of balancing the deficit as we were in 2010'
Andrew Grice has been Political Editor of The Independent since 1998. He was previously Political Editor of The Sunday Times, where he worked for 10 years, and he has been a Westminster-based journalist since 1982. His column, Inside Politics, appears in The Independent each Saturday.
Friday 07 June 2013
Public spending cuts could last until 2020, two think tanks warned today as they raised the prospect that Britain's next two general elections will be dominated by the politics of austerity.
In a joint study, the Institute for Fiscal Studies (IFS) and Institute for Government (IfG) said the £11.5bn of spending reductions for 2015-16 to be confirmed by George Osborne on June 26 would be followed by much deeper cuts for the following two years, to be announced after the election. Spending will fall by 2.8 per cent in 2015-16 but by 7.6 per cent in the next two years.
Carl Emmerson, the IFS deputy director, said he would not be surprised if whoever is chancellor after the 2015 election raised taxes. Julian McCrae, the IfG deputy director, said: "The election campaigns in these periods have a tendency to focus on small differences between the parties. It is almost always after the election that the real problems are properly laid out."
The two bodies warned that even if the UK's annual deficit is eliminated by 2018, it would still have an "uncomfortable" debt mountain running at more than 90 per cent of Gross Domestic Product, which could require a further squeeze.
"Fiscal consolidation is taking longer than planned," they said in their report. "We are still as far away from the target [of tackling the deficit] as we were in 2010. Indeed, it would not be surprising if not just 2015 but also 2020 was an 'austerity' election…There is more to come, for a long time to come."
According to the report, there is still public support for austerity and the number of people who think the Coalition is cutting too quickly has fallen. However, the proportion who believe the Government is cutting fairly has also dropped.
The think tanks said the Coalition's decision to ring-fence the health, schools and overseas aid budgets mean some other departments face huge cuts of up to 30 per cent since 2010. If the Chancellor gives some protection to the Home Office and Ministry of Defence in this month's review, other departments could face cuts in 2015-16 of 10 per cent rather than 8 per cent.
Chris Leslie, a Labour Treasury spokesman, said: "The catastrophic failure of this Government's economic policies is the backdrop to the spending review. Under David Cameron we've had falling living standards and slow growth which is why, as the IFS says, we are no closer to getting the deficit down than three years ago."
- 1 BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
- 2 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 3 Number of young homeless people in Britain is 'more than three times the official figures'
- 4 Motorists taunt suicidal woman on bridge and tell her to 'get on with it'
- 5 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
Number of young homeless people in Britain is 'more than three times the official figures'
The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
£30000 - £35000 per annum: Recruitment Genius: One of the UK's leading web des...
£27000 - £35000 per annum: Recruitment Genius: A growing, successful, friendly...
£16000 - £25000 per annum: Recruitment Genius: This family owned, independent ...
£17000 - £21000 per annum: Recruitment Genius: This is a fantastic opportunity...