ENDING austerity would cost £33 billion a year, according to a report from the conservative Institute for Fiscal Studies (IFS) published yesterday.
The think tank said that it would require Chancellor Philip Hammond to abandon plans to “balance the books” by the middle of the next decade and leave the national deficit at 2.4 per cent of GDP.
Mr Hammond is believed to be considering plans to ditch austerity in the autumn Budget which would mean “a very sharp change in direction” according to IFS deputy director Carl Emmerson.
The report suggest that the government could raise £5bn a year without affecting the deficit by cancelling the planned cut in corporation tax from 19 per cent to 17 per cent.
However, Mr Emmerson warned that sticking to the 2025 target for eliminating the deficit would mean a continuing squeeze on benefits and public spending, while also pushing up taxation.
He said: “Mr Hammond could decide to spend and borrow more. He could decide to spend and tax more. Or he could decide to stick with his current plans and see spending continue to fall.”
Communist Party general secretary Rob Griffiths said: “The so-called extra cost of austerity could be met by raising taxes on the wealthy and big-business monopoly profits — a possibility dismissed in one sentence by the conservative IFS.”
People’s Assembly national secretary Sam Fairbairn told the Star: “Austerity is not over until the public-sector pay cap is not only lifted but people’s living standards are raised significantly.
“When affordable housing is available for everyone who needs it. When students aren’t left with massive mortgage-style debts. When our NHS is fully funded.
When billions of pounds are invested in our future.
“We need a long-term plan, rather than a short-term view. That is why we will be protesting at the Tory Party conference in Manchester this October,” Mr Fairbairn added.