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.
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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