More and deeper cuts await in autumn after Budget U-turn, say experts

More and deeper cuts await public services in the autumn Budget after the Government U-turn on increasing the amount of national insurance that the self-employed pay, the Institute of Fiscal Studies said.

The IFS last week said that ministers' desire to achieve a budget balance during the next Parliament, especially amid demographic changes, "will necessitate yet more years of spending restraint". Today, the director of the IFS, Paul Johnson, said that given the Conservative party manifesto pledge to not increase income tax or national insurance, a pledge the Chancellor said required the ditching of planned increases in NIC contributions to raise more than £2bn this Parliament, meant spending cuts were "the only alternative".

Philip Hammond had abandoned a previously planned acceleration of day-to-day spending cuts to £12bn this Parliament, but still requiring a total cut of £6.9bn. The IFS said that borrowing would not expected to be less than forecast in 2017/18, meaning the U-turn on NICS could only mean a further squeeze in departmental budgets.