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You can find the current article at its original source at https://www.theguardian.com/business/2018/oct/30/ifs-says-hammonds-budget-is-gambling-with-public-finances
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| IFS says Hammond's budget is gambling with public finances | IFS says Hammond's budget is gambling with public finances |
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| Philip Hammond has taken a “gamble” on the future health of the public finances by using better short-term borrowing figures to raise spending on the NHS, according to Britain’s leading tax and spending thinktank. | |
| The Institute for Fiscal Studies warned that the public finances could deteriorate next year, at a time when Britain leaves the EU, which could pose difficult questions for the government after the chancellor increased spending on the health service. | The Institute for Fiscal Studies warned that the public finances could deteriorate next year, at a time when Britain leaves the EU, which could pose difficult questions for the government after the chancellor increased spending on the health service. |
| It said there was possibly a one in three chance that the public finances would deteriorate significantly next year, adding that the judgment to increase spending could push the national debt higher. | It said there was possibly a one in three chance that the public finances would deteriorate significantly next year, adding that the judgment to increase spending could push the national debt higher. |
| Paul Johnson, the director of the IFS, said: “When push comes to shove it’s not tax rises and it’s not the NHS that Mr Hammond is willing to gamble on, it’s the public finances.” | Paul Johnson, the director of the IFS, said: “When push comes to shove it’s not tax rises and it’s not the NHS that Mr Hammond is willing to gamble on, it’s the public finances.” |
| He added that it was “for the birds” that the government would be able to eliminate the budget deficit by the mid-2020s, while adding: “One might question the chancellor’s claim to be taking a ‘balanced’ approach.” | |
| Despite the increase in funding for the health service, the IFS warned that the budget did not represent an end to austerity. “Many public services are going to feel squeezed for some time to come. Cuts are not about to be reversed,” he said. | Despite the increase in funding for the health service, the IFS warned that the budget did not represent an end to austerity. “Many public services are going to feel squeezed for some time to come. Cuts are not about to be reversed,” he said. |
| Although the £20bn funding increase for the NHS by 2023-24 represents a substantial increase in spending on the health service, it will come less quickly than average over its 70-year lifespan. | |
| Total spending outside protected government departments is essentially flat, while it will fall on a per capita basis, the thinktank added. | |
| Hammond revealed an improvement in the public finances – which measures Britain’s income from taxes and outgoings from spending on services – worth about £12bn from the independent budget watchdog, the Office for Budget Responsibility. | |
| Britain is on track to borrow about £25bn in 2018-19, compared with a previous forecast made by the OBR in March for a deficit of about £37bn. | |
| It said the government would have generated a surplus of about £3.5bn in 2023-24, eliminating the deficit, without the increase in spending at the budget on the health service and other areas. Instead, the UK will record a deficit of about £19.8bn, adding to the national debt. | |
| Paul Johnson said that, in the event that the public finances deteriorate, Hammond had probably “painted himself into a corner” which meant that he would “probably allow borrowing to persist at a higher level” given the political difficulty of imposing tough new spending cuts. | |
| The Resolution Foundation also released its analysis of the budget, saying that income tax cuts for millions of workers will “overwhelmingly benefit richer households”, with almost half set to go to the top 10% of households. | The Resolution Foundation also released its analysis of the budget, saying that income tax cuts for millions of workers will “overwhelmingly benefit richer households”, with almost half set to go to the top 10% of households. |
| The analysis by the thinktank (pdf) found that welfare cuts would continue to affect the poorest households, despite Hammond’s announcement that austerity was coming to an end. | The analysis by the thinktank (pdf) found that welfare cuts would continue to affect the poorest households, despite Hammond’s announcement that austerity was coming to an end. |
| Three-quarters of the £12bn in welfare cuts announced after the 2015 election remain government policy. | Three-quarters of the £12bn in welfare cuts announced after the 2015 election remain government policy. |
| The overall package of tax and benefit changes announced since 2015 will deliver an average gain of £390 for the richest fifth of households in 2023-24, the thinktank found, compared with an average loss of £400 for the poorest fifth. | The overall package of tax and benefit changes announced since 2015 will deliver an average gain of £390 for the richest fifth of households in 2023-24, the thinktank found, compared with an average loss of £400 for the poorest fifth. |
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