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Sunak warned public spending freeze would return services to 2010s austerity

30 Oct 2022 3 minute read
Prime Minister Rishi Sunak, PA images Victoria Jones

Many public services would be stripped back to levels seen in the 2010s era of austerity if Rishi Sunak freezes public service spending, a think tank has warned.

Ahead of their autumn budget, the Prime Minister and Chancellor Jeremy Hunt are considering up to £50 billion of spending cuts and tax hikes to fill a gaping black hole in the nation’s finances.

While a real-terms freeze in day-to-day public service spending would save around £20 billion a year by 2026-27, the impact would be huge, according to research by the Resolution Foundation, which focuses on living standards.

It would mean the per-person spending of departments such as transport, justice and local government – assuming health, education, overseas aid and defence are protected – would be slashed by around 9%, the think tank said.

It would come as their budgets remain below pre-austerity levels and are under significant pressure as inflation soars past 10%.

Prices rising far higher than expected when three-year budgets were set in October 2021 has meant an effective £22 billion real-terms reduction in their public service spending power, according to the Foundation.

Some have seen planned spending rises turned into cuts, with real-terms education spending going from an increase of £1.5 billion in 2024-25 from this year to a cut of £1 billion.

New era of austerity

James Smith, Resolution Foundation research director, said: “Significant reductions in day-to-day public service spending are on the cards, while protecting areas such as health and defence. This would repeat a key option chosen by Conservative-led governments since 2010.

“Freezing such spending in real terms would save £20 billion a year but mean a further 9% budget cut to public services such as transport, policing and housing, and take Britain into a new era of austerity.

“Given the political ramifications of such a move, the new PM and Chancellor may choose instead for tax rises to fill in far more of the current fiscal hole than their Conservative predecessors in Downing Street did.”

Mr Sunak has pledged to put “fairness at the heart” of the November 17 budget.

“The Chancellor has already said of course difficult decisions are going to have to be made and I’m going to sit down and work through those with him,” he said on Friday.

The pair delayed the financial statement by more than two weeks from Halloween as public finances appeared in a worse shape after Liz Truss’s leadership.

Mr Hunt has sought the advice of George Osborne, the architect of austerity in the wake of the 2008 financial crisis, as he sounds out Conservative predecessors over his upcoming autumn budget.


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adopted cardi
adopted cardi
1 month ago

And Hunt at the helm – with Osborne advising Who both should be put on trial for virtually destroying the NHS.
For Hunt read “dessicated calculating machine” – who walks away from criticism with a stupid smile on his face – in other words – an idiot.

Y Tywysog Lloegr a Moscow
Y Tywysog Lloegr a Moscow
1 month ago

Wouldn’t bother Rishi Rich. Him and his cronies are minted with taxpayers money

Steve
Steve
1 month ago

Sadly, if we want quality services we need to pay more, that means higher taxes. However, the government needs to start taxing the assets of the rich as well. Much of the wealth in this country is tied up in property etc. which can not be as easliy hidden as capital. There is enormous wealth in central London for a starter. The trouble is much of this asset wealth is tied in the British establishment itself and in particular – rich Tories. So realisically we will never get an asset tax unless things fundamentally change in the UK or, and… Read more »

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