£100bn capital spending plan

Chief Secretary for the Treasury Danny Alexander has unveiled a plan to invest billions infrastructure, including £10 billion to clear a 'backlog' in schools investment.

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IFS issues tax rise warning despite Osborne's cuts

The Government could be forced to raise £6 billion in new taxes after the 2015 General Election despite the Chancellor's latest round of spending cuts, experts have warned.

The Institute for Fiscal Studies (IFS) said that, despite the £11.5 billion worth of reductions for 2015/16 set out by George Osborne, savings of a similar magnitude had already been pencilled in for the following two years.

Chancellor George Osborne revealed details of the Government's spending plans to Parliament yesterday. Credit: Andrew Milligan/PA Wire

IFS director Paul Johnson said there would have to be a "serious debate" on whether fiscal retrenchment on such a scale could be achieved through more spending cuts alone, or whether taxes would have to rise as well.

He said: "At almost any other moment in the past 60 years, announcements of spending cuts of this scale would have created a storm.

"Returning to an 80/20 split for the consolidation as a whole would mean a £6 billion tax increase in the next Parliament. Coincidentally this is pretty close to the average tax increase seen in post-election budgets in recent decades".

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