STABBED BY TUSK
THERESA MAY will have to find an extra £20billion if she really is serious about ending austerity.
The extent of the Tory Prime Minister’s false flag promise to end public sector cuts was exposed yesterday by the country’s top financial watchdog.
Paul Johnson, director of the independent Institute for Fiscal Studies, said the £20billion would be needed by 2022 to fund wage hikes and stop cutbacks in the public sector.
In her “Dancing Queen” speech to the Tory conference, May was forced to acknowledge that a decade of austerity would have to end after Labour’s policy promises scored a hit with voters.
But Johnson said £20billion would be needed just to maintain current spending. Even more would be required to make millions of public sector employees feel better off, and to relieve strains on critical services.
He added: “I don’t know what she means by the end of austerity, but it won’t look like it, of course, if she doesn’t find money for significant pay rises across the public sector.”
With commitments already made to increase health and defence spending, Johnson said the Government have limited room for movement.
He went on: “If the rest of the public sector is to avoid austerity, so at the very minimum, if cuts stop from now on, that is going to require the Government to find at least an extra £20billion or so by the end of this Parliament.
“And even that won’t feel BY TORCUIL CRICHTON Wetminster Editor particularly generous, but it will mean £20 billion more on the deficit compared with what’s being currently planned.”
Johnson spoke as RBS chief executive Ross McEwan warned that a no-deal Brexit could tip the UK into recession. He told the BBC a “bad Brexit” could result in “zero or negative” economic growth.
He also said RBS, still 64 per cent owned by the taxpayer after their bailout 10 years ago, were becoming careful of lending to some parts of the economy, particularly retail and construction.
Nissan also warned against a no-deal Brexit as new figures revealed plummeting vehicle sales. The Japanese firm, who employ almost 7000 people at their Sunderland plant, said crashing out of the EU without a future trading arrangement would have “serious implications”.
Johnson said that if Brexit resulted in a recession, the Government could increase spending to boost the economy. But he added: “That would mean another period of austerity later on to drive the deficit down further.
“If – if – we have a recession following Brexit, that won’t, in my view, result in immediately additional cuts. It will almost certainly result in more spending to support the economy, and then another long slog to get that deficit down again.” DONALD TUSK put the knife into May yesterday by apparently backing just the sort of Brexit deal her Tory right-wing enemies want.
The EU President said a “Canada +++” deal, with free trade and security links, had been on offer from the start. But his plan would also keep Northern Ireland inside EU economic rules.
Tusk also contrasted May’s repeated demands for “respect” with her Foreign Secretary Jeremy Hunt’s “insulting and misleading” attack on the EU, when he compared it to the Soviet Union.