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'

Political Editor

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."

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Guru Careers: Creative Director / Head of Creative

£65K - £75K (DOE) + Benefits: Guru Careers: We are seeking a Creative Director...

Recruitment Genius: IT Technical Support Engineer

£18000 - £25000 per annum: Recruitment Genius: This successful IT reseller bas...

Recruitment Genius: Sales Engineer / Technical Sales Representative - OTE £35k

£30000 - £35000 per annum: Recruitment Genius: One of the Country's leading di...

Recruitment Genius: Logistics Coordinator - Part-Time

£10000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence