'Colossal' spending cuts to come, warns IFS

wotsthat

One of the first thing I noticed in the Autumn Statement was this..

The deficit will fall from £97.5bn in 2013-14 to £91.3bn this year.
It will then be £75.9bn, £40.9bn, and £14.5bn in the three years after that.

i.e. the government has managed to reduce the deficit by £6bn this year but expect it to fall by another £15bn next year.

Has George Osborne, knowing how Brits love to froth about houses, made some stamp duty changes to divert attention away from what is either..

a) a whopping lie
b) an indicator of massive cuts to come

I think the former but the IFS think the latter..

http://www.bbc.co.uk/news/business-30327717

theEnd

They've barely made any cuts so far, so doubt they'll do much going forward.

It's all a lie. Made up pretend growth. Made up cuts.

wymondham

we've got tax cuts to look forward to first (bribe), then after election we'll pay it all back .... and here we go again!!

antrobus

I'm not that convinced that the IFS is doing anything more than reminding us that the task of getting the deficit under control is only half done. Getting it down from £160 billion to £90 billion might be worth a chocolate biscuit or two, but to get the packet you've got to get it down to at least £30 billion or so.

Graham_Devon

It was said last night that in order to do what he's suggesting he will do, AND increase pensions etc, he'll have to do something like cutting the NHS, in it's entirety. That's the sort of saving he'd have to find.

So where you'd find those cuts with the NHS and pensioners ring fenced..... well, no one seems to know.

Thrugelmir

antrobus wrote: »

I'm not that convinced that the IFS is doing anything more than reminding us that the task of getting the deficit under control is only half done. Getting it down from £160 billion to £90 billion might be worth a chocolate biscuit or two, but to get the packet you've got to get it down to at least £30 billion or so.

The hole has always in the long term forecasts. There never was a magic solution. Debt overhang will continue to hold back tax receipts.

Yorkie1

I am no economist so don't shoot me down in flames on that basis.

However, I do know that most government departments have had budget cuts of about 30% so far. The 'easy' cuts have been done via estate and staff reductions. The figures I've seen from Osborne suggest that this amount of cuts, and more, is what the Tories propose again.

The IFS (or whoever it was) commented that the difficulty is that increased cuts will, sooner or later, impact on what services can be delivered, beyond what the general public are prepared to tolerate - at a local and/or national level.

The income (tax/NI take) from the jobs which are being created isn't as high as the forecasts would have anticipated, so the government's income is less and it continues to pay out on working tax credit etc, and so the debt owed continues to remain higher than desired.

michaels

The pension issue is a biggie, the triple lock with such low inflation really is an unnecessary burden but unfortunately having promised it to a group who vote no party dare take it away.

(There is a famous behavioral economics experiment, ask people how much they will pay for a promotional mug and the answer is not much, give them the mug and ask how much they will accept for it and suddenly the same mug is now worth a decent amount)

Thrugelmir

michaels wrote: »

The pension issue is a biggie, the triple lock with such low inflation really is an unnecessary burden but unfortunately having promised it to a group who vote no party dare take it away.

Then they are not worthy to lead the country. Politics isn't a beauty parade. Difficult decisions have to made by someone.

chewmylegoff

Thrugelmir wrote: »

Then they are not worthy to lead the country. Politics isn't a beauty parade. Difficult decisions have to made by someone.

They don't care whether they're fit to run the country, they only care whether they get enough votes to keep getting paid.

vivatifosi

Yorkie1 wrote: »

I am no economist so don't shoot me down in flames on that basis.

However, I do know that most government departments have had budget cuts of about 30% so far. The 'easy' cuts have been done via estate and staff reductions. The figures I've seen from Osborne suggest that this amount of cuts, and more, is what the Tories propose again.

The IFS (or whoever it was) commented that the difficulty is that increased cuts will, sooner or later, impact on what services can be delivered, beyond what the general public are prepared to tolerate - at a local and/or national level.

The income (tax/NI take) from the jobs which are being created isn't as high as the forecasts would have anticipated, so the government's income is less and it continues to pay out on working tax credit etc, and so the debt owed continues to remain higher than desired.

When asked about this, the Tories (Osborne IIRC, but it may have been someone else) said that all they were planning to do was to take public spending back to what it was in the days of Tony Blair. If that's the case, I'm guessing that tax credits are the big spend that has been introduced since, followed by the triple lock guarantee. I also wondered whether they would do something about prescription charges, perhaps making pensioners pay if they aren't in receipt of means tested benefits, though I don't know whether the administration of that may cost more.