Pressure is mounting on chancellor George Osborne to reveal where planned welfare cuts will eventually be implemented.
“It is almost two years since he [Osborne] announced his intention of cutting welfare spending by £12bn,” said Paul Johnson, head of the Institute for Fiscal Studies (IFS).
“Apparently the plan is to have those £12bn of cuts in place by 2017-18. It is time we knew more about what they might actually involve.”
Osborne has said that austerity will end in the final year of next parliament, where he plans a major boost in spending relative to earlier plans.
“The apparent change in economic philosophy in the three months since the Autumn Statement is pretty remarkable,” Johnson said.
The change of heart now allows Osborne to reject claims that public spending as a percentage of GDP will be cut to levels not seen since 1930s.
The IFS also rejected the notion of a squeezed middle – it said most tax and welfare changes had impacted the poorest and richest the most.
However, IFS calculations showed inequality was very similar to what it as in 2007-08.
Osborne yesterday responded to the Office for Budget Responsibilities’ (OBR) prediction that all spending cuts will be put on government departments. “That is not actually the approach that we, as Conservatives, will take,” he told BBC radio. “We want to take a more balanced approach and we would not put all the cuts in the government departments as the OBR forecast shows.”
However, Johnson yesterday pointed out that the OBR is not allowed to make other predictions due to its official mandate. For the same reasons – that the OBR is not allowed make predictions based on policies yet to be made – Johnson said that the rollercoaster profile of public services spending described by OBR chairman Robert Chote was unlikely as cuts would more likely come from welfare.