Over the coming months, as we approach the General Election we will undoubtedly hear various promises and pledges from the political parties. I strongly suspect that one area where promises are made will be with regards future austerity.
Arguably, the country’s deficit has decreased under the current government and again, arguably, this has been as a result of the austerity measures put in place.
One might think that austerity must come to an end in the next Parliament, but I believe that you would be wrong to think that.
In order to “balance the books”, in addition to the £8.7bn of cuts already set out for next year, the Chancellor in situ will still need to find £37bn over the following 3 years.
The Institute for Fiscal Policies reports that the Conservatives have the most aggressive approach to the deficit by saying that tax revenues will be sufficient to cover both day to day spending and fund capital projects on infrastructure. However, both Labour and the Lib Dems will borrow to fund capital projects. It is thought that such borrowing would be around £28bn. Is this a case of lessons not being learnt? Time will tell!