Yahoo Finance IFS warns of Labour and Tory ‘conspiracy of silence’ over future tax and spending plans
Jeremy Hunt and Rachel Reeves are joined in a “conspiracy of silence” over tens of billions of pounds in tough tax and spending choices, with the next government likely to inherit the toughest outlook for the public finances in 80 years, Britain’s leading economics thinktank has warned.
The Institute for Fiscal Studies said the chancellor’s budget on Wednesday had laid the ground for “staggeringly hard choices” due after the general election for whichever party forms the next government.
The experts on the UK’s public finances said Hunt had earmarked cuts to spending on public services outside health, defence and education worth £20bn, while driving up national debt levels within the narrowest of margins to meet his self-imposed fiscal rule.
In stinging remarks about the government, Paul Johnson, the director of the IFS, said Hunt had laid the ground so that the next parliament “could well prove to be the most difficult of any in 80 years” for a chancellor wanting to bring down debt.
However, he also issued sharp criticism of the shadow chancellor, suggesting that neither party had been upfront with the public over difficult decisions for tax and spending.
Johnson said that Labour had been “just as shy” as the Conservatives about spelling out its plans for taxes and spending after the election.
“If I am sceptical about Mr Hunt’s ability to stick to his current spending plans, I am at least that sceptical that Rachel Reeves will preside over deep cuts in public service spending,” he said.
“The government and opposition are joining in a conspiracy of silence in not acknowledging the scale of the choices and trade-offs that will face us after the election.
“They, and we, could be in for a rude awakening when those choices become unavoidable,” he said.
