Plans give voters 'stark' choice
Labour's spending plans risk adding £170 billion to the national debt over 15 years while the Conservatives are on a course to cut unprotected budgets by more than a quarter, a leading economist has warned.
In analysis of the positions set out by the parties for governing after the general election, the Institute for Fiscal Studies (IFS) chief Paul Johnson suggests Ed Miliband's proposals could leave the country hamstrung in the event of a fresh recession.
But Labour dismissed the prediction as being based on a "ludicrous assumption" about what it would do beyond 2020 and insisted it had a "tough but balanced" plan for the nation's finances.
Voters will face a choice between Conservative plans to cut at least £33 billion or £7 billion after 2015-16 under Labour, he said.
But Labour would be "happy to keep borrowing to pay for investment spending", which at present levels would be around £25 billion a year.
Tory plans mean many Whitehall departments could face cuts of 41% by the end of the decade.
Mr Johnson wrote: "Lest there be any doubt, there is a big difference between £7 billion of cuts and £33 billion of cuts.
"In fact, the difference between the parties may be even greater than that. If you take the plans set out in the autumn statement at face value, spending cuts of more than £50 billion could be required after 2015/16."
Setting out the "pretty stark" choice facing voters, he said if Labour continued borrowing as much as their rule allowed, the national debt could increase by £170 billion by the end of the next decade while the Tories could further cut unprotected budgets by 26% after 2015-16.
Mr Johnson said: " Under autumn statement plans, Conservatives could be cutting unprotected budgets by 26% after 2015-16, or an extraordinary 41% over the whole period from 2010.
"Even merely to meet their more modest fiscal target, these budgets would need to be cut by more than 15% after 2015-16. Labour would need to implement cuts of only 3%.
"All of this, of course, points to another big difference. If Labour is spending more - and if it doesn't raise taxes - it will be borrowing more and, perhaps more important, presiding over a greater burden of debt.
"The effect of this might be relatively modest in the short term, but borrowing as much as their rule would allow beyond 2020 would mean national debt about £170 billion higher (in today's terms) by the end of the 2020s than would be achieved through a balanced budget.
"So, even if Labour does keep spending cuts to a minimum over the next parliament, further tax increases or spending cuts might prove necessary down the line to reduce risks with the long-term state of the public finances further."
Warning of the dangers of high debt, he told the newspaper: "The problem is that another recession will strike one day. Going into a new recession with debt still high - and it is higher now than at any time since the late 1960s - could leave less room for manoeuvre.
"The sort of additional borrowing that we are able to support as we made our way through the recent period might not be as easily financed."
Conservative plans will prove tough to deliver, Mr Johnson suggested.
He pointed out that Conservatives would want to achieve a surplus on the overall budget and do not want to borrow to invest.
"That means they would need to find spending cuts of around £33 billion after 2015/16," he added.
A Labour spokesman said: " George Osborne has borrowed over £200 billion more than planned. His failure to deliver rising living standards for all has directly led to his failure to balance the books.
"Labour will cut the deficit every year and get the current budget into surplus, and national debt as a share of GDP falling, as soon as possible in the next parliament.
"The figures in the Times headline are based on a ludicrous assumption about what Labour might do between 2020 and 2030. We have set out a tough but balanced plan to balance the books after the election. Nobody is setting out targets for future parliaments."