Public spending will return to 1970s levels

GOVERNMENT spending is likely to head back towards Seventies levels over the next parliament, with both Labour and the Conservatives planning big increases in the size of the state, research has found.

The Resolution Foundation said that “after an unprecedented decade of austerity, both main parties are gearing up to turn the spending taps back on”.

The recent “generous spending round” could mean overall government spending rising to 41.3 per cent of gross domestic product (GDP) by 2023 under the Conservatives, the think tank said.

That would place government spending under the Conservatives well above the average of 37.4 per cent recorded in the two decades running up to the financial crisis – and only marginally below the 42 per cent average recorded between 1966 and 1984.

On Labour’s spending plans, recommitting to the £48.6billion of extra current spending announced in the 2017 manifesto, coupled with a £250billion ten-year capital plan, would mean government spending as a share of GDP rising to 43.3 per cent.

Matt Whittaker, deputy chief executive at the Resolution Foundation, said: “The fact is that whatever promises are made over the course of this election campaign, taxes are going to have to rise over the coming decade.”

The Government has also confirmed that it will spend over £5 billion on ending the benefits freeze in April next year in a move criticised by Labour as a “cynically timed announcement”.