Chancellor will be required to spend £billions, to end austerity, says IFS
In a new report, economic think tank the Institute for Fiscal Studies (IFS) has suggested that Chancellor Philip Hammond will be required to spend £billions more in order to end austerity.
The report suggested that spending increases promised by the Chancellor could be absorbed by a commitment to fund international aid, the UK’s defence sector and the NHS.
According to the IFS, some departments have already experienced especially big cuts since 2010, meaning that it may prove to be difficult for the government to make any further savings.
Commenting on the report, Ben Zaranko, Research Economist at the IFS, said: “The Chancellor needs to decide what period the next Spending Review should cover, and what funding to make available to it.”
“The government has already committed to increase day-to-day NHS spending by £20 billion over the next five years. Even though the latest plans have overall day-to-day spending increasing over that time, these increases wouldn’t be enough even to cover the NHS commitment in full.”
“This suggests yet more years of austerity for many public services.”
The IFS also suggested that if the UK leaves the EU without a Brexit deal, the UK economy would struggle to grow, potentially leading to lower spending or higher taxes in the medium term.