Analysts warn of 'colossal' spending cuts
05 Dec 2014
The Institute for Fiscal Studies (IFS) has confronted Chancellor George Osborne following the spending cuts announced in the Autumn Statement.
An initial statement from the IFS warned of a ‘fundamental re-imagining of the state’, which Mr Osborne rebuked as ‘totally hyperbolic’.
IFS Director, Paul Johnson, responded: ‘The Chancellor is right to point out that it has proved possible to implement substantial cuts over this parliament. One cannot just look at the scale of implied cuts going forward and say they are unachievable. But it is surely incumbent upon anyone set on taking the size of the state to its smallest in many generations to tell us what that means.
‘How will these cuts be implemented? What will local government, the defence force, the transport system, look like in this world?’
The Office for Budget Responsibility (OBR), upon the Chancellor’s Autumn Statement speech, confirmed that the proposed cuts would see the state reduced to its smallest size relative to GDP for 80 years. The OBR also said that only 40% of planned cuts will have been made by the general election in 2015.
Government plans foresee that by 2019/20, departmental spending will have been cut to £279.7 billion. Current central government spending stands at £317.5 billion.
Mr Osborne said: ‘I’m not pretending these are easy decisions or that they have no impact. But the alternative of a return to economic chaos, of not getting on top of your debts, of people looking at Britain across the world and thinking that is not a country in charge of its own destiny, is not a world that I want to deliver’.