Reported by The Guardian
Experts round on chancellor over ‘scattergun’ budget, saying he ducked big tax and spending decisions
John Healey has backed away from cutting the cost of welfare this parliament, amid dire warnings his first budget could lead to brutal spending cuts because of a £28bn shortfall in public finances.
Experts rounded on Healey’s steady-as-she-goes budget on Thursday, with the Institute for Fiscal Studies saying he had left himself a mountain to climb by ducking big tax and spending decisions.
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In a damning analysis, the IFS said Healey would need to have set aside an additional £28bn a year, to offset the impact of inflation on future spending plans and hit the target of spending 3% of GDP in defence by 2030.
Instead Helen Miller, the IFS director, said Healey had opened the way to “a spending review that looks pretty brutal for some departments” – including real-term budget cuts.
“Public service spending plans look extremely tight. They don’t look to me like plans that this government would want to deliver,” she said, adding that meant Healey could face “another season of damaging speculation about tax rises”.
The welfare bill will not be part of the spending review, which focuses on departmental budgets. But in a bid to underline his determination to balance the books, the chancellor pointed to plans for reform, telling BBC Radio 4’s Today programme: “We have to bring the benefits bill down.”
He had earlier appeared to say cuts would be made in this parliament, when asked if there would be a reduction in the bill before the next election. “There will be. There will be a reduction in the benefits bill,” said Healey. “We’ll do that in a Labour way and we will do that because it is simply not good for Britain or progress to have a bigger and bigger benefits bill.”
However, Treasury officials clarified that he had not meant to give a timeline and Healey later told Channel 4: “It’s not correct to say that we are going to bring this welfare bill down in this parliament because we’ve not set a timetable for…