News | Published March 14 2019

Philip Hammond told to perform "urgent" spending review

The Institute for Fiscal Studies claims that Philip Hammond and the Treasury need to perform an "urgent" spending review, following yesterday's Spring Statement.

The organisation's head, Paul Johnson, said that there is still a number of core economic issues that need addressing without delay.

These areas of focus include benefits reduction, the social care green paper and difficulties in funding for educational sector.

Johnson stated that the Spring Statement was inadequate given the great challenges at hand, and that concrete proposals for funding needed to arrive quickly.

He remarked: "By once again declining to set totals for the forthcoming spending review, [the chancellor] deferred making some of the biggest non-Brexit decisions of the parliament".

In essence, his claim is that too great a preoccupation with Brexit has come at the expense of other, equally pressing domestic issues.

Johnson was not entirely pessimistic, however. He reported that tax revenue can be increased and solutions can be found, but that "they need to be carefully thought out and implemented if they are to be both effective and fair."

The institute also projected that Britain's economy would have been two per cent larger "had the Brexit referendum not occurred."

He statement went on: "[Had the referendum not happened], the deficit would have been smaller still and the fiscal room for manoeuvre greater", adding that "the end of austerity" could have arrived sooner and in greater measure.

In Hammond’s speech yesterday, the Treasury’s official view on a “disorderly Brexit” were also made clear, during which Hammond said it had the potential to become “a significant blow” to the UK economy. Hammond nevertheless reaffirmed the government’s commitment to provide the country with a “deal dividend.”

Just how orderly Brexit will in fact be remains unclear, with many reckoning that today’s vote will make the outcome of Brexit less clear still.

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Authored by

Thomas Wilson
Political Editor
March 14 2019

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