By a Newsnet reporter
Warning that the UK is still as far from deficit reduction targets as it was in 2010, two leading think tanks have forecast over a decade of cuts for the UK, with the next two Westminster General Elections being dominated by the politics of austerity.
Whatever party wins the next election, say the Institute for Fiscal Studies (IFS) and the Institute for Government (IfG) in a joint report, it will have to implement cuts to the public sector of over £23 billion, and the current round of spending cuts will be dwarfed by the cuts still to come.
The influential think tanks said in a statement:
“Spending reductions are set to be a long term feature of UK public finances, rather than a short, sharp experience.”
The warning comes the day after Prime Minister David Cameron asserted to the Conservatives’ Scottish conference in Stirling that Scotland was “better off” as a part of the UK.
The IFS and the IfG added:
“We are still as far away from the (budget deficit) target as we were in 2010. Indeed, it would not be surprising if not just 2015 but also 2020 was an ‘austerity’ election.”
Conservative Chancellor George Osborne promised before the 2010 UK General Election that he would be able to deal with the deficit within 4 years, however the new report makes clear that little progress has been made, and further swingeing cuts to public services lie ahead.
With the Coalition swearing to protect health and education from the cuts, other government departments face even greater cuts to the budgets in order to make up the shortfall. The Treasury is currently carrying out a spending review in order to identify areas of spending which can be reduced. At the end of last month Mr Obsorne announced that eight government departments had agreed to make budget cuts of between 8% and 10% in the year 2015-16.
Although agreement has not yet been reached with the Scotland Office, the Scottish budget looks likely to suffer a similar level of cuts. If money earmarked for health and education is protected, other areas of Scottish Government expenditure could face a cut of as much as 10%.
However the think tanks warn that these cuts will not be sufficient to meet deficit reduction targets, and say that a further round of £23 billion in cuts will be required, as well as £9 billion in tax rises.
The prospect of budget cuts, austerity, and crippled public services will make it more difficult for the anti-independence campaign to argue that Scotland is better off as a part of the UK.
A recent report from respected economist Margaret Cuthbert for the Jimmy Reid Foundation, has shown that structural imbalances in the UK economy are set to continue irrespective of whichever party is in power at Westminster, enriching London and the South East of England at the expense of Scotland and the other countries and regions of the UK.
These structural imbalances mean that the countries and regions of the UK outside London and the South East will bear the brunt of future cuts in government expenditure, and may delay a recovery in Scotland’s economy for decades.