Cutting the deficit: There is an alternative

Article

The Spending Review on 20 October is certain to be one of the most significant political events of this Parliament. The country is braced for spending cuts on a scale without precedent in the post-war period.

Progressive economists believe the Coalition's plan for rapid and deep deficit reduction will put at risk the fragile economic recovery and undermine prospects for future growth and shared prosperity.

However, beyond simple protest, it is incumbent upon those who are critical of the Coalition government's plans to propose credible and costed alternatives. This briefing paper sets out to do just that.

In summary, ippr's alternative plan for deficit reduction states that the government should:

- Maintain investment on capital projects

- Reduce the underlying deficit more slowly

- Maintain a 65:35 ratio between spending cuts and taxes

- Accept that the 20% rate of VAT will not be reversed

- Tax universal benefits

- Lift the ring-fence on NHS spending.

Related items

  1. Towards universal opportunity for young people

    Outlining a vision for young people which could increase social mobility while also reducing inequality and disadvantage, so that every young person has the opportunity to build a decent life.

  2. One year in: the government is making decent down payments for the years ahead

    It’s fair to say it hasn’t been a straightforward first year for the government. 

  3. Britons back local leaders with fiscal firepower

    “Death and taxes,” they say, are life’s only certainties. But there’s a third - wherever taxes are controlled, power lies.