Tough tax decisions for incoming government

The fiscal challenge awaiting the next government will hang over the election campaign like a dark cloud says the Institute for Fiscal Studies (IFS) in a new report: Public finances and the 2024 general election by Carl Emmerson Paul Johnson and Ben Zaranko.

Both main parties are committed to reducing debt as a share of national income but a combination of high debt interest payments and low expected growth is forecast to make that more difficult to achieve than in any parliament since at least the 1950s claims the IFS.

Taxes as a share of national income are forecast to grow from 36.5% of national income in 2024-25 to 37.1% in 2028-29 due in part to the continuing freeze on income tax thresholds. Spending on everything other than debt interest is set to fall from 40.8% to 39.0% of national income....