Independent half right on costs of fiscal black hole

The Independent today headline, "£2,840 - cost to every family of filling public finance black hole." The problem is that the number is only half right.

The Independent today accompany their story on the Treasury leak with, “£2,840 – cost to every family of filling public finance black hole.” The article goes on:

“Every family in Britain will have to pay an extra £2,840 a year in higher taxes and cuts in public services by 2017 to fix the public finances.”

The problem is that the number is only half right.

Analysis by the Institute of Fiscal Studies, reproduced below, show that announced tax increases including the 50p top rate, and cuts to current spending and investment already account for half the necessary fiscal tightening.

The additional cost for “as-yet unannounced tax increases or current spending cuts” is £1,430. This, however, is an average. As the IFS themselves make clear, “they will fall disproportionaly on those with very high incomes, those on above-average earnings and motorists.”

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