UK faces further spending cut shock

Friday 13th July 2012



The Office for Budget Responsibility has said that the Government must make more cuts or raise taxes to keep UK public finances under control.



The OBR said in 2017-18 public spending needed to be cut by another £17billion. If not, then the same amount of money needs to be raised in taxes.



Doing this would then peg back total debt to 40% of GDP by 2061 - otherwise it will rocket to 89% of annual income by 2061.



OBR chairman Robert Chote told the BBC: "There are big uncertainties around these sorts of numbers, but it does suggest that once the current crisis-related repair job has been completed, there are still challenges to confront thereafter."



Meanwhile, also speaking to the BBC, Chief Secretary to the Treasury, Danny Alexander said: "There is a continuing challenge for governments not just to take the right decisions in the short term, as I believe we are with the plan on dealing with the deficit, but also to take the right decisions for the long term, as I think we have, for example, by increasing the state pension age and by those dramatic reforms to public service pensions which will be saving some £430billion over the next 50 years."



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George Bailey