22.03.13
IFS warns of tax rises following Budget cuts
Huge tax rises could be coming after the next general election, the Institute for Fiscal Studies (IFS) has warned.
Its post-Budget analysis found that Whitehall spending on public services is set to sink to the lowest level in over a decade by 2018. Despite the extreme cuts, the public finances are in such a bad shape that it is likely taxes will rise after the election to ease the pressure.
Departmental spending cuts are forecast to ease off for two years, but intensify again in 2015-16.
The Government has also chosen to delay some planned austerity measures and spending commitments until after the election and tax rises by the next government could avoid further cuts in Whitehall.
Paul Johnson, head of the IFS, told the Financial Times: “The implication is that the real effect of public spending cuts pencilled in for the next parliament will be even more severe than expected.
“Add to that the fact we are promised more capital spending, more spending on social care and a more generous childcare subsidy, within an overall spending envelope that has not been expanded, and the outlook for all other unprotected spending looks grim indeed.”
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