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Spending manifestos will be tough for politicians

A report from think-tank IPPR has shown all parties face tough choices on how to balance the books in their election manifestos.

The ‘Pressures and priorities: the long-term outlook for Britain’s public finances’ sets out four possible approaches to policymaking.

This includes raising the long-term rate of growth and employment rate to help achieve fiscal consolidation; increase tax revenues to make up the shortfall in future income; identify priorities for public spending; and to reform public spending.

While current popular debate largely focuses on the usefulness of austerity measures, the IPPR analysis looks at the possible drivers of tax revenues and public spending over the long term.

The analysis is based upon projections by the Office for Budget Responsibility, of the long-term state of the public finances.

Next year, the Government will undertake a Spending Review that will cover the final year of this Parliament, and the first two years following the planned 2015 General Election.

Nick Pearce, IPPR Director, said: “There are no easy options for politicians in the next Spending Review because of the weakness of the economy and the fragility of the nation’s public finances.

“The economy needs stimulus for growth now, but fiscal consolidation in the next Parliament. That makes some combination of spending cuts and tax rises inevitable. Realistic and credible fiscal plans will have to go beyond small or symbolic measures that do not match the scale of the task.

“At the moment, the Chancellor has started a debate about how to cut £10bn from the welfare budget, in order to protect departmental budgets from deeper cuts. But this is not the only option available to him. Politics is about difficult choices but there are a range of different options that should be debated honestly during this party conference season and well into next year.”

This was posted in Bdaily's Members' News section by Tom Keighley .