Economic research institute, the Institute for Fiscal Studies, has announced its findings that the UK will face £23bn of spending cuts or tax rises after the 2015 election.
The IFS expects that Osborne will borrow £70bn more in 2014/5 than he originally expected and real terms spending to be flat from 2013 onwards as departmental spending reductions of 18.4 per cent by 2017/18 are offset by non-discretionary spending increases. Borrowing fell this year largely on the back of the NHS coming in under budget (£2.2bn underspend).
By 2015 there are predicted to be 1.4m more higher rate taxpayers. The tax cuts in beer, fuel and the higher personal allowance will reduce government revenues by £6bn balanced by a £7bn rise in NI and revenues from pensions and avoidance crackdowns.