This morning Guido highlighted several of the Chancellor’s Budget porkies, this afternoon the IFS twists the knife. Osborne told the House that “we shouldn’t go faster, we shouldn’t go slower” on the rate of deficit reduction. Yet Paul Johnson from the IFS confirms we are indeed now going slower:
“the long term plan did change again. In the March Budget, and indeed in the Conservative manifesto, we were promised budget balance by 2018-19. That magic moment has now been shifted back to 2019- 20. In part that reflects a gentler than planned path for spending cuts, including welfare spending cuts”
“Relative to the March Budget, borrowing forecasts rose for each of 2016-17, 2017-18 and 2018- 19 despite increases in tax receipts resulting both from forecast changes and policy announcements. One result is that budget balance is now expected in 2019-20 not in 2018-19. The increase in borrowing and delay in reaching budget balance is largely down to an easing in the planned public service spending cuts through to 2018–19.”
So cuts are easied and borrowing is increased – all while taxes rise. What was that David Cameron said in the TV debates?
“More debt and more taxes, more debt and more taxes…”