Labour’s plans for deficit reduction could mean that spending cuts finish by 2016 – just as the Tories’ biggest planned cuts will start to kick in. The post-Budget briefing from the Institute for Fiscal Studies highlights “the big differences between the parties” on planned spending cuts.
At the publication of the briefing, Director of the IFS Paul Johnson said:
“Our latest estimates suggest that Labour would be able to meet its fiscal targets with no cuts at all after 2015-16.”
According to the report, the Tories’ spending plans would see larger cuts between 2016 and 2018 than anything that has been seen over the last five years, while these estimates suggest that Labour’s plans could see an end to cuts by that point. It also describes the post-recession period as “by far the slowest recovery in incomes in modern history”.
Ed Balls reacted to the report saying:
“This is a damning verdict on George Osborne’s Budget.
“The IFS says the Chancellor’s Budget plans involve annual spending cuts after the election which are twice as deep as anything we’ve seen in the last five years.
“The Tories have said today that they won’t tell us where their welfare cuts will come from until after the election. People will conclude that to make their sums add up the Tories would do what they always do – raising VAT again and putting our NHS at risk.
“As the IFS says, this government’s changes have hit the poorest hardest of all. And even on George Osborne’s flawed measure, the Tories have left people worse off today. If the Tories want to spend the election campaign telling people they’ve never had it so good, they’re even more out of touch than I thought.
“We need Labour’s better plan which will put working families first, balance the books in a fair way and save our NHS.”