Osborne will need bigger axe to meet budget goal - IFS

LONDON Fri Dec 6, 2013 5:31pm GMT

Britain's Chancellor of the Exchequer George Osborne (C) delivers a budget update at Parliament in London December 5, 2013, in this still frame taken from video. REUTERS/UK Parliament via REUTERS TV

Britain's Chancellor of the Exchequer George Osborne (C) delivers a budget update at Parliament in London December 5, 2013, in this still frame taken from video.

Credit: Reuters/UK Parliament via REUTERS TV

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LONDON (Reuters) - Chancellor of the Exchequer George Osborne will have to take a bigger axe to ministerial budgets or make further deep cuts to welfare to meet his target of a budget surplus before the end of the decade, a leading think-tank said.

Osborne said on Thursday he was aiming for a surplus in 2018/19 and warned of tough choices ahead to achieve it. The Institute for Fiscal Studies said on Friday austerity would need to tighten even more to reach that goal.

IFS director Paul Johnson said spending on central government public services - which exclude welfare - would have to be cut by 20 percent by 2018/19 from their level before Osborne began his austerity programme, deeper than the 8 percent reduction so far.

Put another way, Osborne's plans would require that public-service spending be cut 3.7 percent a year between April 2016 and March 2019, more than the 2.3 percent a year in the preceding five-year period, Johnson said.

Alternatively, the government could cut welfare a further 12 billion pounds ($19.62 billion) a year by 2018/19, equivalent to about 50 percent of welfare savings already enacted by Osborne.

"That's the scale of what remains to be done if the Chancellor carries through his plans," Johnson said, referring to Osborne by his title of chancellor of the exchequer.

(Reporting by William Schomberg; Editing by Larry King)

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Comments (3)
laodizea wrote:
I am a king of Russia .Russia does not allow me in Russia .When I persist I was send in Psychiatric clinic and they destroyed my health I could not move .Christ will punished you .You are evil country I am a designer and worked in Columbia pictures but I live in Misery I am a King of England as well Windsor from William the Conquer Christian and Arthur with Holy Grail. I say it will be the Revelation because all you are liars I simply want home in Russia anyway and you are doing nothing to help me with it in your poor country, where however Normans have brought Christian flags and coded Revelation

Dec 06, 2013 6:20pm GMT  --  Report as abuse
Geofbob wrote:
The CIA World Factbook informs us that in 2012 only 49 national budgets out of 215 were in balance or surplus; and most of these “virtuous” nations are oil-rich (eg Kuwait & Saudi) or utterly incomparable to the UK (eg Tonga & the Comoros islands) (https://www.cia.gov/library/publications/the-world-factbook/rankorder/2222rank.html) Of the 49,only Saudi (12.6% surplus), Brazil (2.2% surplus) & Germany (0.2%)are in the G 20.

The median position is a deficit of 2.8% – Osborne would surely gain more credibility & respect if he aimed at that figure, rather than pursuing the Holy Grail of a balanced budget.

Dec 06, 2013 6:30pm GMT  --  Report as abuse
ActionDan wrote:
Hasn’t Osbourne hit the poor and disabled hard enough?

Isn’t it time that agricultural subsidies were slashed (or at least capped) in a gesture towards the landowners are also sharing the debt burden?

Dec 10, 2013 6:18pm GMT  --  Report as abuse
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