Austerity 'to be worse than under Osborne'

Rishi Sunak's government has set the country on course for a "more painful" austerity drive after the next general election than during the decade of belt-tightening under George Osborne, leading economists say.

- Richard Partington , Kiran Stacey , Phillip Inman

 

A day after the chancellor Jeremy Hunt's autumn statement, the Institute for Fiscal Studies said £20bn package of tax cuts was almost entirely funded by swingeing realterms reductions to public spending planned from 2025.

Having sought to blunt the highest tax levels since the second world war, details contained in the chancellor's plans showed persistently high inflation would slash almost the same amount from public service spending power by 2027.

While the government is committed to funding for key areas including the NHS, schools, defence and overseas aid-economists said unprotected departments would face deep reductions in their budgets without a rapid change in course. Those likely to suffer the most are further education, local government, prisons and the courts.

The IFS director, Paul Johnson, said major cuts would be harder to achieve because of the era of austerity kickstarted by Osborne, then chancellor, when the Tories came to power after the financial crisis. "That was painful. Doing it again will be more painful still. Mr Osborne made.

his cuts after a decade of big spending increases. Mr Hunt, or his successor, will have no such luxury."