A new report has claimed that the next Government will have to cut spending on public services by 167 billion pounds or be forced to raise taxes. The Institute of Economic Affairs said the findings of its latest report should be a ‘massive wake up call’ in the run up to the major political parties launching their election manifestos.
The report, ‘Cutting public spending by 167 billion pounds: A modest but necessary aim’, sets out the scale of the problem the country is facing and says the level of cuts needed go far beyond the kinds of efficiency savings that have been talked about so far.
Mark Littlewood, the Director General of the Institute said that so far the electorate had heard little from any party about the need to make substantial cuts and he added: “If they aren’t intending to cut public spending dramatically they must be planning on raising taxes. Perhaps unsurprisingly we are yet to hear this acknowledgement from any politicians.”
Mr. Littlewood said the argument about whether or not to raise National Insurance by a fraction were grossly inadequate. “Cuts must be made far in excess of ‘efficiency savings’ or the British public may be sure their taxes will rise substantially to plug the gap,” he said. Unless serious action was taken, he said, the next government could possibly become the highest tax raising administration in the country’s history.
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