Thinktank slams 'regressive' cuts
The massive £81 billion spending cuts announced by Chancellor George Osborne may not be enough to meet his target of getting rid of Britain's state deficit within four years, a respected economic thinktank has warned.
The Institute for Fiscal Studies said that further tax rises or deeper spending cuts may be needed if Mr Osborne's measures fail to get Britain's books back in balance.
The IFS said that the cuts - which will see £7 billion slashed from welfare payments - will have a "regressive" effect, hitting the poor harder than the rich.
And the thinktank warned that the public spending reductions will "reduce the quantity and quality of some public services" to such an extent that the Chancellor may want to put some of the money back in.
A review of the cuts package after two years would be "a sensible move" in the circumstances, suggested IFS acting director Carl Emmerson.
Mr Osborne won cheers from the Conservative benches as he set out his Comprehensive Spending Review to the House of Commons, describing his measures as necessary to pull Britain back from the "brink of bankruptcy".
And he was boosted by the backing of the Fitch ratings agency, which said the CSR should help the UK retain its prized triple-A credit rating.
In a statement which marked a definitive end to the period of expansion of state activity under Labour, Mr Osborne confirmed that 490,000 public sector jobs are expected to go as most Whitehall departments cut their budgets by around a fifth in real terms over the next four years.
The police, prisons, universities and local councils, will all be hit hard as the cuts bite.
And he said that he was bringing forward to 2020 the date at which the state pension age will rise to 66 for both men and women, saving £5 billion a year.