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Tory plans to achieve budget surplus by 2025 slammed as ‘disappointing’

Conservative targets to achieve a budget surplus for public sector borrowing by 2025 have been described as “disappointing” by a key economic think tank.

In analysis by the Centre for Policy Studies (CPS), it was found that the last time net borrowing was in surplus was around 16 years ago, during 2000-01 – meaning that under the current Tory plan, net borrowing will have been in surplus for 25 consecutive years.

When the Coalition government came into power in 2010, it was pledged that the current budget deficit would be eliminated by 2014-15, with public sector borrowing planned to reach 2.1% of GDP by 2014-15 – two targets that were both missed.

On top of that, the CPS found that the Conservatives had promised to ensure that public sector borrowing was in surplus by 2019-20, a target that was again pushed further back after the UK voted to leave the EU last year.

“According to the Conservative Party’s fiscal target reported in the press, the UK is set to reach a budget surplus by 2025-26,” said Daniel Mahoney, head of economic research at the CPS. “This will mean that the UK has lived beyond its means for a quarter of a century.”

Mahoney added that while it was understandable that Theresa May wanted fiscal wriggle room during the Brexit negotiations, the current fiscal target was very disappointing.

“It should be seen as a ‘worst case’ scenario. The next government must aim to achieve a budget surplus at an earlier date,” he concluded.

Today’s warning also comes after the IFS last year stated that the government would be facing a £25bn black hole by 2019 due to economic downturn resulting from Brexit.

And before that, the ONS also said that public borrowing had increased unexpectedly amid a “worsening economic outlook,” and that achieving budget surplus would be very difficult to achieve to targets.

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