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TLDR:
- Jeremy Hunt’s financial planning criticized by IFS
- Warnings against announcing tax cuts without funding plan
Jeremy Hunt’s financial planning has been deemed “dubious” and lacking credibility by the Institute for Fiscal Studies (IFS). The IFS has cautioned against the Chancellor announcing tax cuts in the upcoming budget without a clear plan on how they will be funded. The report highlights the need for concrete plans rather than vague pledges to reduce spending, considering the fragile state of public finances. Critics are concerned about the potential impact of further austerity on already strained public services.
In response to pressure from Tory backbenchers, Hunt is considering tax cuts and measures to boost growth. However, the IFS warns that existing promises to protect certain sectors mean that any resulting austerity would heavily affect unprotected Whitehall ministries. The IFS also raises concerns about Hunt’s plans to reduce overall increases in Whitehall spending, noting the potential negative impact on essential services like council systems, justice systems, and universities.
The IFS emphasizes the necessity for clarity in spending plans and cautions against hasty decisions on tax cuts without a comprehensive understanding of the consequences. The report suggests that past tax increases and current financial projections raise doubts about the feasibility of further tax cuts without risking the stability of public finances. The Chancellor faces challenges in balancing the budget and meeting fiscal rules while potentially sacrificing crucial services in the process.
