A reputable think tank organization has released a sobering assessment of the financial obstacles that the incoming administration will face.
“Like a dark cloud” hanging over the election campaign, according to the Institute for Fiscal Studies (IFS), is the situation of public finances.
It forewarns of the possibility of future tax increases or reductions in public services.
It demands a “open and robust” conversation about how each party intends to address issues.
Labour and the Conservatives have pledged to reduce the amount of debt relative to the country’s income. To keep the cost of borrowing by the government from financial markets low, all of the major parties would probably have some sort of self-imposed regulations.
However, the independent IFS asserts that, absent other measures, decreasing future debt may prove more challenging to achieve—regardless of government—than it has been for any Parliament since at least the 1950s due to high interest payments on current debt and low projected economic growth.
In order to comply with regulations, the current chancellor has already budgeted for what, when population growth and inflation are factored in, may amount to future funding reductions of more than 10% for certain public services, such higher education and the judicial system.
