– There is a small amount in the UK despite the tax hike
The tax hike determined by the British Chancellor may not be enough to bail out some public services under pressure.
The IFS Research Center said on Tuesday that despite a “25-year-old” tax hike to recover public funds after the outbreak, there was little room for British Cancer Risen Sun to bail out public services under pressure.
Rishi Sunak, who supports budget conservatism, faces criticism from opponents for recently announced tax hikes, including on social contributions and corporate taxes.
Public spending will be “42% of national income, more than 2% of its pre-epidemic level,” the Institute for Financial Research (IFS) said in a study released before the 27th presentation. His draft budget and budget guidelines are for three years.
“Decade of severe cuts”
But the IFS said the increase in spending would be aimed specifically at other government priorities, such as the health sector and carbon neutrality, economic restructuring between different parts of the country or social security reform.
If the “combined effects of growing health care costs and the economy” have not yet reversed pre-epidemic levels, it means “there is little money to be spent on many other public services known as” severe cuts for decades. ” IFS Director Paul Johnson summarizes in a press release.
According to the study, conducted by Citibank and the Nufield Foundation, local government, justice or higher education should be satisfied with moderate increases or face budget cuts over the next two years.
“The inevitable consequence”
According to the IFS, these tax increases “have gone under the guise of epidemics” but they are “an inevitable consequence of the aging of the population and the pressure on the health system”. Public debt, which contributed 15.5% to the UK’s gross domestic product (GDP) last year, has declined but is very high this year. At the end of August, the country’s debt was 19.6% of GDP.
According to an IFS study, this year’s debt could be “50 50 billion more than planned” but the positive impact on public finances may be limited by the “slow recovery” economy in particular. The economic recovery in the UK has actually been sluggish for months, especially due to labor shortages and supply chain problems affecting some sectors.
According to the IFS “uncertainty is incredibly high.” If the economy performs better than expected, the finance minister may drop some tax increases, but “if things get worse, we need to triple these taxes”.