Friday, June 25, 2010

The unachievable budget?

Over the last few days the Institute of Fiscal Studies has predominated in the commentary on the implications of the budget for public services. This is understandable when an independent and well-respected think tank warns of "the longest, and deepest sustained, of cuts to public service spending since (at least) WW2". The IFS also suggests that higher education, home office, justice, transport and housing could see spending cut by one-third over this parliament.

Less media profile has been given to the Social Market Foundation who have suggested the scale of cuts are unachievable:

The tax measures announced today mean cutting over £60 billion from public spending over the next five years. With universal benefits protected, the NHS needlessly ring-fenced and the unaffordable triple lock on pensions, cuts elsewhere will be swingeing which would undo their efforts today to protect the least well off.

The state's creditors want the deficit closed and they don't much care how it's done, so long as the plan is viable. The danger for the Government is that the country simply won't swallow this level of cuts to public services - hair-shirts have never flown off the shelves. It's therefore likely that the Chancellor will be back with more taxes before long.

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