Chancellor George Osborne will need to make cuts “on a colossal scale” to fulfil his plans he laid out in the Autumn Statement, the Institute for Fiscal Studies (IFS) has warned.
IFS director Paul Johnson explained to reporters at a briefing that Osborne had only completed £35 billion of cuts and would need to make savings of a further £55 billion over the next parliament to complete his plans.
Johnson went on to say that the public would be justified in asking whether the chancellor was planning a “fundamental re-imagining of the role of the state”.
According to the IFS, the Conservatives have pledged income tax cuts following the 2015 election worth £7 billion a year, but would need welfare cuts or tax rises worth £21 billion if reductions in departmental spending were to continue at the same pace as it has for the current parliament.
“One thing is for sure – if we move in anything like this direction, whilst continuing to protect health and pensions, the role and shape of the state will have changed beyond recognition.”
In an earlier statement, Johnson complained about Osborne’s repeated claim that he would find additional revenues from preventing tax avoidance, a tactic the chancellor used in last year’s Budget. He argued:
“A Chancellor focussed on the sound management of the public finances over the long run would not make a habit of repeating these sorts of manoeuvres.”