autumn 2017 budget: options for easing the squeeze
TRANSCRIPT
Carl Emmerson and Thomas Pope
Presentation at the Institute of Chartered Accountants in England and Wales
London, 30th October 2017
Autumn 2017 Budget: Options for easing the squeeze
The March Budget plan
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Terrible economic performance is important backdrop
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
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140 20
08Q
1
2009
Q1
2010
Q1
2011
Q1
2012
Q1
2013
Q1
2014
Q1
2015
Q1
2016
Q1
2017
Q1
2018
Q1
2019
Q1
2020
Q1
2021
Q1
2022
Q1
2008
Q1
= 10
0
GDP per adult since 2008 Q1 (at time of March 2017 Budget)
18% gap
15% gap
2% per year trend
GDP per person aged 16+
Notes and sources: see Figure 2.1 of Autumn 2017 Budget: Options for easing the squeeze
The rise and fall of the deficit
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
2.8
9.9
2.9
+6.1 –5.6
–1.1
+1.4
0.0
2.0
4.0
6.0
8.0
10.0
12.0 PS
NB
(200
7–08
)
Chan
ge in
sp
endi
ng
Chan
ge in
rece
ipts
PSN
B (2
009–
10)
Chan
ge in
sp
endi
ng
Chan
ge in
rece
ipts
PSN
B (2
017–
18)
Chan
ge in
sp
endi
ng
Chan
ge in
rece
ipts
PSN
B (2
021–
22) Pe
r ce
nt o
f nat
iona
l ino
cme
Notes and sources: see Figure 2.2 of Autumn 2017 Budget: Options for easing the squeeze
Latest out-turns and March 2017 Budget forecasts for taxing, spending and borrowing
Spend 0.5% GDP
higher than 2007–08
Tax 0.4% GDP
higher than 2007–08
Further deficit reduction to come
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
2.8
9.9
2.9
0.7
+6.1 –5.6
–1.7
–1.1
+1.4
+0.5 0.0
2.0
4.0
6.0
8.0
10.0
12.0 PS
NB
(200
7–08
)
Chan
ge in
sp
endi
ng
Chan
ge in
rece
ipts
PSN
B (2
009–
10)
Chan
ge in
sp
endi
ng
Chan
ge in
rece
ipts
PSN
B (2
017–
18)
Chan
ge in
sp
endi
ng
Chan
ge in
rece
ipts
PSN
B (2
021–
22) Pe
r ce
nt o
f nat
iona
l ino
cme
Notes and sources: see Figure 2.2 of Autumn 2017 Budget: Options for easing the squeeze
Latest out-turns and March 2017 Budget forecasts for taxing, spending and borrowing
Policy changes doing most of the work
Net tax rise of £6 billion in 2021–22 relative to 2017–18
‒ Largest new tax measure is reduction in dividend allowance
Benefit cuts worth £12 billion saving in 2021–22
‒ Mostly from measures already in place
‒ Largest cut to come is benefits freeze
Cuts to departmental spending as a share of national income save £24 billion by 2021–22
‒ Investment spending to increase
‒ Large cuts to day-to-day spending
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Spending cuts not shared equally across departments
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
-60% -40% -20% 0% 20% 40% 60%
DEFRA
HMT & HMRC & DWP
Justice
DCLG: communities
Scotland, Wales, N.I.
Home Office
Education
Health
Defence
Culture
DfID
Transport
2010–11 to 2019–20
2017–18 to 2019–20
Notes and sources: see Figure 2.10 of Autumn 2017 Budget: Options for easing the squeeze
Real terms departmental budget cuts, 2010–11 to 2019–20
Where would this leave tax and spend?
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Tax and spend since 1948, latest outturns and March Budget forecast
25
30
35
40
45
50 19
50
1955
–56
1960
–61
1965
–66
1970
–71
1975
–76
1980
–81
1985
–86
1990
–91
1995
–96
2000
–01
2005
–06
2010
–11
2015
–16
2020
–21
Per
cent
of n
aton
al in
com
e
Notes and sources: see Figure 2.2 of Autumn 2017 Budget: Options for easing the squeeze
Lowest
spending since
2003–04
Highest
receipts since
1986–87
Highest tax
receipts since
1969–70
Current receipts
Total Managed
Expenditure
National accounts taxes
Where would this leave the deficit?
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
-4
-2
0
2
4
6
8
10
12 20
00–0
1
2001
–02
2002
–03
2003
–04
2004
–05
2005
–06
2006
–07
2007
–08
2008
–09
2009
–10
2010
–11
2011
–12
2012
–13
2013
–14
2014
–15
2015
–16
2016
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2017
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2018
–19
2019
–20
2020
–21
2021
–22
Per
cent
of n
aton
al in
com
e
Notes and sources: see Figure 2.6 of Autumn 2017 Budget: Options for easing the squeeze
Target: 2% limit in 2020–21
Public sector net borrowing
Cyclically-adjusted public sector net borrowing
Overarching objective: eliminate deficit by mid-2020s
Public sector net borrowing since 2000–01
Where would this leave debt?
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
0
10
20
30
40
50
60
70
80
90
100 20
00–0
1
2001
–02
2002
–03
2003
–04
2004
–05
2005
–06
2006
–07
2007
–08
2008
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2009
–10
2010
–11
2011
–12
2012
–13
2013
–14
2014
–15
2015
–16
2016
–17
2017
–18
2018
–19
2019
–20
2020
–21
2021
–22
Per
cent
of n
aton
al in
com
e
Target: debt falling
between 2019–20 and
2020–21
Public sector net debt
Public sector net debt, excluding Bank of England
Notes and sources: see Figure 2.7 of Autumn 2017 Budget: Options for easing the squeeze
Public sector net debt since 2000–01
Developments since March
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Data so far this year paints a rosier picture
Borrowing last year now thought to have been £45.7 billion, £6 billion lower than forecast in March
Borrowing running behind the March forecast this year too
Not all of this improvement is likely to persist for the whole year
‒ Self-assessment receipts expected to be much weaker than last year
But a number of taxes are performing better than expected so far
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Data so far this year paints a rosier picture
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
-5%
0%
5%
10%
15%
20%
PAYE NICs Corporation tax VAT Stamp duty land tax
Ann
ual g
row
th r
ate
OBR March Year to date
Notes and sources: see Figure 3.6 of Autumn 2017 Budget: Options for easing the squeeze
+£1.2bn +£1.0bn
+£2.1bn
+£1.2bn +£1.5bn
Growth in tax receipts: OBR March forecast for year as a whole and year to date
Data so far this year paints a rosier picture
A number of taxes are performing better than expected so far
‒ Could lead to improvement of around £6 billion
Spending on benefits and contributions to the EU also lower than expected
‒ Could save around £2¾ billion
Improvements come in spite of weaker-than-expected growth
If strength persists, would lead to lower medium-term borrowing
‒ Worth around £12 billion by 2021–22
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Policy changes since March will increase borrowing slightly
Reversal of self-employed National Insurance contributions (NICs) measure costs £500 million per year
‒ May have a bigger effect in the long-run
Confidence and supply deal: £450 million per year for two years
‒ On Health, Education and Infrastructure in Northern Ireland
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Policy changes since March will increase borrowing slightly
Changes to student loan system a considerable long-term cost, but little effect on short run measures
‒ Freezing fees at £9,250 small cut to University funding in short-run
‒ Repayment threshold to £25,000 means more debt written off
‒ Long-run cost of £2 billion a year, but not until 2046
Total effect of policy measures already announced increases borrowing in 2019–20 by £1.5 billion
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Higher interest rates likely to mean higher borrowing in the short term
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
2017 2018 2019 2020 2021 2022
Base
rat
e (%
)
Notes and sources: see Figure 3.5 of Autumn 2017 Budget: Options for easing the squeeze
£1.5 billion more
borrowing in
2018–19
£0.7 billion
more
borrowing
in 2021–22
October
March
Market expectations over the base rate: March and now
Independent forecasters have downgraded growth forecasts slightly
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
98
100
102
104
106
108
110
112
2016Q1 2017Q1 2018Q1 2019Q1 2020Q1 2021Q1 2022Q1
Real
GD
P (2
016
Q1=
100)
Economy 0.3%
smaller in 2019 than
forecast in Feb
Notes and sources: see Figure 3.1 of Autumn 2017 Budget: Options for easing the squeeze
OBR, March
Bank of England, February
Bank of England, August
Real GDP: Bank of England and OBR forecasts since February
Taking these changes together, borrowing could be slightly down on the March forecast
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
0
20
40
60
80
2017–18 2018–19 2019–20 2020–21 2021–22
PSN
B (£
bill
ion)
OBR March
‘Moderate’
£5 bn
Notes and sources: see Figure 3.7 of Autumn 2017 Budget: Options for easing the squeeze
Public sector net borrowing under different growth scenarios
But a substantial productivity downgrade seems likely
OBR have stated a productivity growth downgrade is likely
‒ Robert Chote: “for now we are minded to revise down potential productivity growth significantly”
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Productivity forecasts have been consistently optimistic
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
95
100
105
110
115
120 20
05
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Out
put p
er h
our
(200
9 Q
1=10
0)
Out-turn
June 2010
March 2017
Notes and sources: see Figure 3.3 of Autumn 2017 Budget: Options for easing the squeeze
Successive forecasts for productivity growth since June 2010
Recent productivity performance has been historically terrible
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6% 19
72
1974
19
76
1978
19
80
1982
19
84
1986
19
88
1990
19
92
1994
19
96
1998
20
00
2002
20
04
2006
20
08
2010
20
12
2014
20
16
2018
20
20
Ann
ual g
row
th (%
)
Out-turn March forecast Average
Notes and sources: see Figure 3.4 of Autumn 2017 Budget: Options for easing the squeeze
‘Very poor’
scenario
‘Weak’ scenario
Productivity growth since 1972: Out-turns and the March forecast
A substantial productivity downgrade seems likely
OBR have stated a productivity growth downgrade is likely
‒ Robert Chote: “for now we are minded to revise down potential productivity growth significantly”
‒ Only slightly offset by an expected increase in hours and employment forecasts
‘Very poor’ productivity scenario
‒ 0.4% annual growth considered new normal
‒ Average real growth 2017-2021: 0.7% (1.8% in March)
‘Weak’ productivity scenario
‒ Downgrade halfway towards average of last seven years
‒ Average real growth 2017-2021: 1.3% (1.8% in March)
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Weaker productivity would mean higher borrowing
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
0
20
40
60
80
2017–18 2018–19 2019–20 2020–21 2021–22
PSN
B (£
bill
ion)
‘Moderate’
OBR March
‘Weak’
‘Very poor’
£19 bn
£53 bn
Public sector net borrowing under different growth scenarios
Notes and sources: see Figure 3.7 of Autumn 2017 Budget: Options for easing the squeeze
All of which would be structural
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
0%
1%
2%
3%
4%
2017–18 2018–19 2019–20 2020–21 2021–22
Stru
ctur
al b
orro
win
g
(% n
atio
nal i
ncom
e)
‘Moderate’
OBR March
‘Weak’
‘Very poor’
£13 bn headroom
Structural borrowing under different growth scenarios
Notes and sources: see Figure 3.8 of Autumn 2017 Budget: Options for easing the squeeze
2% target
And the National Debt would rise as a result
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
75%
80%
85%
90%
95%
100%
2017–18 2018–19 2019–20 2020–21 2021–22
PSN
D (%
nat
iona
l inc
ome)
‘Moderate’
OBR March
‘Weak’
‘Very poor’
Public sector net debt under different growth scenarios
Notes and sources: see Figure 3.9 of Autumn 2017 Budget: Options for easing the squeeze
So what’s a Chancellor to do?
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Elections tend to be followed by tax rises
£13bn
£11bn
£6bn
£16bn
£15bn
£25bn
0 5 10 15 20 25 30
2015
2010
2005
2001
1997
1992
£ billion (2017–18 terms)
Elec
tion
yea
r
Long run net tax rise from measures announced in the year following general elections
Notes and sources: see Figure 3.10 of Autumn 2017 Budget: Options for easing the squeeze.
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Asymmetric response to public finance news
-10 -5 0 5 10 15 20
Underlying improvement (5 occasions)
Impact on borrowing (£ billion)
Average change in underlying borrowing and policy response since 2010
Short run policy
Long run policy
Underlying change
Notes and sources: see Figure 3.11 of Autumn 2017 Budget: Options for easing the squeeze.
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Asymmetric response to public finance news
-10 -5 0 5 10 15 20
Underlying improvement (5 occasions)
Underlying deterioration (10 occasions)
Impact on borrowing (£ billion)
Average change in underlying borrowing and policy response since 2010
Short run policy
Long run policy
Underlying change
Notes and sources: see Figure 3.11 of Autumn 2017 Budget: Options for easing the squeeze.
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Options for tax rises
One option is to announce tax rises
‒ if so could do worse than increasing rate(s) of one of the main taxes
‒ NICs rates rose in early 1990s, early 2000s and early 2010s
Could decide not to cut rate of corporation tax from 19% to 17%
‒ boost revenues by around £5 billion
‒ require House of Commons vote and break manifesto commitment
Politics makes any significant tax takeaways difficult
‒ apart from the seemingly obligatory “tax avoidance” measures?
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Tax cuts more likely?
£6 billion net tax rise already still to come and tax burden forecast to rise to level not maintained since 1950s
Conservative manifesto commitment to increase income tax personal allowance to £12.5k and higher-rate threshold to £50k
‒ would now only cost £1.1 billion a year
‒ on top of £12 billion spent increasing personal allowance since 2010
Another freeze in fuel duties would cost £¾ billion a year
‒ on top of the £5.4 billion cost of freezing them since 2010
‒ would cost £¼ billion if frozen for petrol but not diesel
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Possible benefit giveaways? (1/2)
£12 billion of cuts in benefits for working age families are still in the pipeline, on top of £29 billion implemented since 2010–11
Universal credit being rolled out nationwide
‒ rollout 8% complete in September, rising to 13% in March
‒ less generous than legacy system, cash terms protection for existing recipients
Concern with time taken before claimants receive first full payment
‒ paid monthly in arrears
‒ 7 waiting days before unemployed can claim: return to 3 waiting days would cost of £0.3 billion a year
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Possible benefit giveaways? (2/2)
Most working age benefits to be frozen for next two years
‒ 4 year freeze (2015–16 to 2019–20) initially expected to save £3.4 billion
‒ rising inflation means now on course to save £4.6 billion
‒ could move to 1% increase for two years, or cancel final year of freeze, and keep broadly to the original saving
‒ could scrap final two years at cost of around £4 billion
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Day-to-day public service spending squeezed
4,250 4,400 4,550 4,700 4,850 5,000 5,150 5,300 5,450 5,600
270 280 290 300 310 320 330 340 350 360
2007
–08
2008
–09
2009
–10
2010
–11
2011
–12
2012
–13
2013
–14
2014
–15
2015
–16
2016
–17
2017
–18
2018
–19
2019
–20
2020
–21
2021
–22
£ pe
r ca
pita
(201
7–18
pri
ces)
£ bi
llion
(201
7–18
pri
ces)
Resource Departmental Expenditure Limits
Notes and sources: see Figure 2.10 of Autumn 2017 Budget: Options for easing the squeeze.
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Per capita (£, RH axis)
Total (£bn, LH axis)
Per capita spending to fall by a further 5% (£15bn) on top of the 13% (£46bn) since 2010–11
Retaining public sector pay cap not risk free
0
5
10
15
20
1997
–98
1998
–99
1999
–00
2000
–01
2001
–02
2002
–03
2003
–04
2004
–05
2005
–06
2006
–07
2007
–08
2008
–09
2009
–10
2010
–11
2011
–12
2012
–13
2013
–14
2014
–15
2015
–16
2016
–17
2017
–18
2018
–19
2019
–20
Perc
enta
ge
Average difference between public and private sector hourly pay
Average difference Projection: increase scales by 1% each year Projection: increase scales in line with Consumer Prices Index Projection: increase pay in line with private sector earnings
Notes and sources: see Figure 4.1 of Autumn 2017 Budget: Options for easing the squeeze.
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
NHS: extremely tight spending settlement
-4
-2
0
2
4
6
8
10
12 19
56–5
7
1960
–61
1965
–66
1970
–71
1975
–76
1980
–81
1985
–86
1990
–91
1995
–96
2000
–01
2005
–06
2010
–11
2015
–16
2020
–21
Perc
enta
ge
Annual real increase in per capita UK NHS spending
Notes and sources: see Figure 4.2 of Autumn 2017 Budget: Options for easing the squeeze.
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
NHS: managing to do more
3.2
7.7 6.7
15.7 15.1
0
5
10
15
20
English DH spending per
capita
A&E attendances
Non-elective (emergency) admissions
Elective admissions (overnight admissions
and daycases)
First outpatient
attendances
Perc
enta
ge c
hang
e,
2009
–10
to 2
016–
17
English hospital activity per capita
Notes and sources: see Figure 4.3 of Autumn 2017 Budget: Options for easing the squeeze.
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
NHS: clear signs of strain (1/2)
70
75
80
85
90
95
100
2004
–05
2005
–06
2006
–07
2007
–08
2008
–09
2009
–10
2010
–11
2011
–12
2012
–13
2013
–14
2014
–15
2015
–16
2016
–17
2017
–18
Per
cent
A&E patients in England increasingly likely to wait more than 4 hours
Notes and sources: see Figure 4.4 of Autumn 2017 Budget: Options for easing the squeeze.
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
% admitted, transferred or discharged within four hours
National target = 98% National target = 95%
NHS: clear signs of strain (2/2)
0
5
10
15
Apr-
09
Oct
-09
Apr-
10
Oct
-10
Apr-
11
Oct
-11
Apr-
12
Oct
-12
Apr-
13
Oct
-13
Apr-
14
Oct
-14
Apr-
15
Oct
-15
Apr-
16
Oct
-16
Apr-
17
Oct
-17
Per
cent
% waiting more than 18 weeks from referral to treatment in England
Notes and sources: see Figure 4.5 of Autumn 2017 Budget: Options for easing the squeeze.
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
8% target
NHS: clear signs of strain (2/2)
0
10
20
30
40
50
Aug-
07
Mar
-08
Oct
-08
May
-09
Dec
-09
Jul-1
0
Feb-
11
Sep-
11
Apr-
12
Nov
-12
Jun-
13
Jan-
14
Aug-
14
Mar
-15
Oct
-15
May
-16
Dec
-16
Jul-1
7
Feb-
18
Per
cent
% waiting more than 18 weeks from referral to treatment in England
8% target
Notes and sources: see Figure 4.5 of Autumn 2017 Budget: Options for easing the squeeze.
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
NHS: clear signs of strain (2/2)
0
10
20
30
40
50
Aug-
07
Mar
-08
Oct
-08
May
-09
Dec
-09
Jul-1
0
Feb-
11
Sep-
11
Apr-
12
Nov
-12
Jun-
13
Jan-
14
Aug-
14
Mar
-15
Oct
-15
May
-16
Dec
-16
Jul-1
7
Feb-
18
Per
cent
% waiting more than 18 weeks from referral to treatment in England
8% target
Notes and sources: see Figure 4.5 of Autumn 2017 Budget: Options for easing the squeeze.
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Prisons: spending and staff cut
60
70
80
90
100
110
120 20
09–1
0
2010
–11
2011
–12
2012
–13
2013
–14
2014
–15
2015
–16
2016
–17
2017
–18
Per
cent
Notes and sources: see Figure 4.6 of Autumn 2017 Budget: Options for easing the squeeze.
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Prison spending
Prison staffing
Prison population
Prisons: spending and staff cut
0
50
100
150
200
250 20
09–1
0
2010
–11
2011
–12
2012
–13
2013
–14
2014
–15
2015
–16
2016
–17
2017
–18
Per
cent
Prison staffing
Prison population Prison spending
Notes and sources: see Figure 4.6 of Autumn 2017 Budget: Options for easing the squeeze.
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Prisons: assaults on staff, assaults on prisoners and prisoner self-harm up
0
50
100
150
200
250 20
09–1
0
2010
–11
2011
–12
2012
–13
2013
–14
2014
–15
2015
–16
2016
–17
2017
–18
Per
cent
Prison staffing
Prison population Prison spending
Notes and sources: see Figure 4.6 of Autumn 2017 Budget: Options for easing the squeeze.
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Prisoner self-harm
Assaults on prisoners
Assaults on staff
So what’s a Chancellor to do? (1/2)
Mr Hammond has been dealt a tricky hand
If forecast productivity growth were unchanged public finance outlook would be slightly stronger than in March
Likely productivity downgrade would, if significant, dominate
‒ downgrading halfway towards recent experience could increase forecast borrowing in 2021–22 from £17 billion to £36 billion
‒ fiscal targets for this parliament could still be met, albeit with much reduced headroom
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
So what’s a Chancellor to do? (2/2)
Unlikely to announce a significant fiscal tightening
Budget giveaways seem likely, but an “end to austerity” unlikely
‒ choosing between competing spending demands difficult
Chances of eliminating the deficit anytime soon keep receding
‒ possible public finances will perform much better than expected
‒ but perhaps time to admit that a firm commitment to running a budget surplus from the mid-2020s onwards is no longer sensible
© Institute for Fiscal Studies Autumn 2017 Budget : Options for easing the squeeze
Carl Emmerson and Thomas Pope
Presentation at the Institute of Chartered Accountants in England and Wales
London, 30th October 2017
Autumn 2017 Budget: Options for easing the squeeze