Think-tank warn on May’s austerity boast
THERESA May’s boast that she has ended austerity doesn’t add up, experts warn today.
The PM declared that years of Tory cuts were over in her conference speech this month – and promised that “better days” lie ahead.
But the Institute for Fiscal Studies said she would need to conjure up £19billion a year to achieve BY ANDREW GREGORY a “limited definition” of ending austerity. And that would still leave £7billion worth of savage cuts to social security.
With the Budget looming this month, the think-tank also said May’s claim of ending austerity is “incompatible” with Philip Hammond’s vow to balance the books by the mid-2020s. The IFS said that to find an extra £19billion, Hammond would have to raise taxes by the equivalent of 1p on VAT, income tax, National Insurance and VAT.
IFS director Paul Johnson said: “Hammond has a big choice. He could end austerity, as the Prime Minister has suggested.
“But even on a limited definition of what that might mean it would imply spending £19billion a year more than planned.
“Alternatively, the Chancellor could stick to his guns on the deficit and leave many public services to struggle under the strain of a decade and more of cuts.
“This is going to be the toughest of circles to square.”