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Tuesday, 18 August 2015

Tuesday, August 18, 2015 Posted by Hari No comments Labels: , , , , , , , ,
Posted by Hari on Tuesday, August 18, 2015 with No comments | Labels: , , , , , , , ,


SOURCE TELEGRAPH: Autumn Statement: George Osborne to shrink the State to its smallest since the 1930s
The Chancellor's spending plans mean the public spending relative to the whole economy would be the smallest in 80 years, the Office for Budget Responsibility (OBR) said. The OBR, the independent government forecaster, said that Mr Osborne's tax and spending policies will require an austerity programme in the next Parliament much bigger that the one implemented by the current Government. That will mean far-reaching new reductions in "day-to-day" public services, including those provided by local councils, the forecasters said. It calculated that between 2009-10 and 2019-20, spending on public services and central government will fall from £5,650 to £3,880 per head in 2014-15 prices. Around 40 per cent of these cuts will be delivered during this Parliament, with around 60 per cent to come during the next, the OBR estimated. With major items of spending like the NHS and the state pension protected from cuts by political promises, independent economists say that the scale of the cuts that would be required in unprotected areas would be unprecedented and potentially leave the State unable to deliver some of its current services. The budget for Whitehall departments, not including health and education, would fall from £188 billion at the start of this decade to £86 billion in 2020, the OBR suggested. If Mr Osborne's plans are realised, public spending in 2019/20 will be 35.2 per cent of gross domestic product. It currently stands at 40.5 per cent. The lowest level achieved by Margaret Thatcher's governments was 37.3 per cent in 1988/89. The current post-war low was set in 1957/58 towards the end of an economic boom that led Harold Macmillan to declare that "most of our people have never had it so good." Mr Osborne has suggested that the Conservatives would try to find many of the post-election cuts from the welfare budget. He also promised to find £10 billion of savings in public sector “efficiency.” He gave few details of how the £10 billion will be found, but signalled it would mean at least another two years of pressure on public sector wages. Matthew Whittaker, an economist at the Resolution Foundation, said that none of the parties has been candid with the electorate about “just how much more fiscal pain there may be to come after the election.”



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