A warning from a thinktank highlights the pressing need for Britain's next government to address a significant shortfall of up to £33bn in public finances.
The Resolution Foundation emphasised that unless drastic austerity measures are implemented, this gap will persist. According to the thinktank, the ongoing debate between Labour and the Conservatives regarding funding pledges lacks a realistic perspective. Election promises heavily rely on budget cuts that may prove challenging to enact.
Both major parties aim to decrease national debt within five years, but factors such as increased interest payments on debts, sluggish productivity growth, and the £10bn expense for compensating victims of the infected blood scandal pose substantial obstacles.
While the Office for Budget Responsibility predicts that the government is nearing its debt-to-GDP target with a mere £9bn margin, the Resolution Foundation argues that the winning party in the general election will confront the dilemma of either raising taxes or implementing spending cuts to meet this goal.
The thinktank suggests that if the next government adheres to existing spending plans, the deficit could hover around £12bn. However, prioritising areas like prisons, police, and local government may balloon the deficit to as much as £33bn.
The International Monetary Fund echoed concerns with a post-election deficit estimated at £30bn in its recent assessment of the UK economy.
