Budget 2013: IFS says borrowing in 2014 will be 70bn more than hoped in 2010

Budget 2013: IFS says borrowing in 2014 will be 70bn more than hoped in 2010.

Borrowing this year will be the 70bn more than was predicted in 2010, according to the Institute for Fiscal Studies (IFS).

Presenting its post-budget analysis, the Institute for Fiscal Studies (IFS) also predicted that the cut to national insurance for companies means that cabinet ministers are going to have to find another £3.5bn in cuts from their Whitehall departments in the year to come.

The first three numbers are borrowing in pounds billion expected this year, next year and in 2014/15. The second three numbers were the forecasts for the same years made at the time of the June 2010 Budget

The chancellor’s claims to be bringing down borrowing this year below last year’s total were also slammed by the IFS, which said that the chancellor had “carefully managed the numbers with an eye on the headline borrowing figures”.

In other words, the chancellor’s claim to have brought down borrowing this year compared to last was based on a fiddling of the figures. As the IFS goes on to say:

“The truth is that borrowing is the same this year as it was last year. And it will be the same next year as this year.”
“There is every indication that the numbers have been carefully managed with a close eye on the headline borrowing figures for this year. It is unlikely that this has led either to an economically optimal allocation of spending across years or to a good use of time by officials and ministers.”
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2 Responses to “Budget 2013: IFS says borrowing in 2014 will be 70bn more than hoped in 2010”

  1. LB

    So Osbourne is doing exactly what Labour wants.

    Borrow and spend to keep growth up.

    It’s not working of course, because the real issue is austerity caused by tax, tax and more tax.

  2. Ed

    Some specifics for Plan B.
    A putative Labour government in 2015 would inherit an unenviable
    economic situation, including public debt at 80% of GDP. We think of its
    principal task as increasing its revenue through selective state spending.
    (Obviously social welfare issues are also important, but we need to keep
    focused). Please consider the following policy ideas for tapping spending power
    in a recession:

    1. Increase affordable housing. This is now a consensus between Ed Balls, George Osborne, and the CBI. However, mortgage loans for private building may not be the best option. (Those
    in the budget offering are being snapped up by wealthier house-owners). Local
    councils could commission leases on empty office buildings converted into
    flats, and add them to their rentable stock, and keep the income. Conversions
    also give VAT income, by contrast with new-build.

    2. Biogas/ gasification.
    Food waste, grass cuttings etc can be fermented to give methane, which drives
    gas turbines to generate electricity. Waste including cars can also be burnt to
    generate steam for turbines. (See e.g. Chinook Oldbury.) The strike price for
    such electricity should be below the 10p per kWh benchmark set by Qatari gas.

    3. Public sector tourist attractions such as historical re-enactments, military tattoos, demonstration sporting events in Olympic heritage sites. The UK is the world’s 7th
    biggest tourist destination, with 29.2 million visiting in 2011 and spending
    US$17.2 billion. London is by far the most-visited capital in the world. There is additional scope for expanding internal UK tourism in recent retirees (such as us).

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