Newspaper article The Evening Standard (London, England)

Osborne Cuts Aren't Deep Enough ... Prepare for More, Say Experts

Newspaper article The Evening Standard (London, England)

Osborne Cuts Aren't Deep Enough ... Prepare for More, Say Experts

Article excerpt

Byline: Nicholas Cecil and Joe Murphy

GEORGE OSBORNE may have to make even deeper cuts or raise taxes higher to tackle Britain's economic crisis, experts warned today.

The highly respected Institute for Fiscal Studies also stressed that the poorer will be harder hit than the better-off by tough measures to rebalance the country's books.

In addition, the think tank challenged the Chancellor's claim that cuts to some Whitehall departments would be less severe than proposed by his predecessor Alistair Darling.

Labour has accused him of taking a "reckless gamble" with the economy with the swingeing cuts announced yesterday.

But the IFS warned that Mr Osborne's axing of public spending may not have gone far enough to get rid of Britain's structural budget deficit this Parliament.

It said: "It is quite possible that further tax rises or deeper spending cuts might prove necessary."

Mr Osborne said that he had built in "an additional year of caution". He told BBC radio: "At the moment, we have the IFS saying it might not be enough. In an uncertain world economy, I think its perfectly reasonable to have some caution built into your numbers."

The IFS also said that the combined impact of the comprehensive spending review yesterday, Mr Osborne's June Budget and Labour's last Budget in March would be "regressive".

The finding contrasts with the Chancellor's insistence that fairness was key to the reduction of [pounds sterling]81 billion from public spending, including [pounds sterling]18 billion of welfare cuts, detailed yesterday.

IFS acting director Carl Emmerson told The Standard: "They (the Treasury) still think overall it's progressive. We still think overall it's regressive."

But Mr Osborne highlighted yesterday a Treasury analysis which shows people on the highest income will pay more towards the entire fiscal consolidation in terms of the proportion of their income and consumption of public services combined. …

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