Tunnel vision: Autumn Budget 2018 and 'ending austerity'
- Document type
- Whittaker, Matthew
- Resolution Foundation
- Date of publication
- 24 October 2018
- Social Policy, Poverty Alleviation Welfare Benefits and Financial Inclusion
- Social welfare
- Material type
Download (2.1MB )
This briefing paper explores the challenge facing the Chancellor in this year’s Budget: balancing the conflicting goals of ‘ending austerity’ and lowering debt as a share of GDP.
- An ‘end-of-austerity’ package that ensures that no department need face any further cuts in real-terms per capita spending beyond 2019-20, alongside cancelling the final year of the four-year benefit freeze and re-investing in the work allowances that underpin the new Universal Credit (UC) system would cost around £31bn in 2022-23.
- The good news for the Chancellor is that the headroom he was expected to have at the time of the Spring Statement – which stood at £15.4bn in 2020-21 – is likely to have grown. By 2022-23, this headroom could stand at £39.5bn.
- The bad news for the Chancellor is that borrowing at this scale would almost certainly put him in breach of his debt rule (for public sector net debt to be falling as a share of GDP in 2020-21).
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