Chancellor George Osborne is facing a £30 billion black hole in his budgetary plans if he is to honor the Conservative Party’s general election pledges and still meet the party’s deficit-slashing targets by 2020, the Institute for Fiscal Studies warns.
The IFS’ scathing assessment of Osborne’s spending pledges surfaced in its pre-election analysis, a mere 15 days ahead of Britain’s general election.
The tax think tank’s report, published on Thursday, found the Tories would need to make the cuts from government departments by 2020. The IFS said this £30 billion black hole would exist even if Prime Minister David Cameron’s party managed to raise £10 billion from yet-to-be clarified welfare cuts, and a further £5 billion from its proposed measures to clamp down on tax-avoidance.
Examining the party’s economic policy proposals, the IFS argued the cuts the Conservatives had failed to account for would amount to a 30 percent reduction in funding for government departments between 2010 and 2020.
“Despite planning for more austerity, the Conservatives’ detailed tax policies amount to a net giveaway, their detailed social security measures would only provide a 10th of the cuts that they have said they would deliver, and their commitments on aid, the NHS and schools would increase spending in these areas,” the IFS said.
The IFS’ assessment of Labour’s spending plans was more forgiving. The think tank’s report said the party’s less austere deficit-slashing targets would only require a modest £1bn in further spending cuts over the coming parliament if Shadow Chancellor Ed Balls achieved his objective of drumming up an additional £7.5 billion through the party’s tax avoidance measures.