For once, it’s not “economic headwinds” from Europe that are to blame, instead it’s greying heads. The Office for Budget Responsibility (OBR) will warn in a report today that the government will have to trim its spending or raise further taxes to stop debt spiralling in years to come.
The OBR blames an ageing population for holes appearing in the government’s budget over the next 50 years if spending carries on at the current rate. Its annual Fiscal Sustainability Report says that public finances will explode as pension and healthcare costs balloon.
So, on top of austerity cuts already planned, the OBR suggests we may need another £50 billion more. The good news is that it can be spread out over many years.