Press Story

IPPR has reacted to the announcement from Rachel Reeves of a £22 billion shortfall in public finances, and the government’s plans to address this.

Dr George Dibb, head of the centre for economic justice at IPPR, said:

“We knew the economic inheritance of the new government would be a challenge but today’s statement contains new revelations about the pressures it is up against. The chancellor has put on the table very clearly the tough choices she faces. It is sensible to hold a long-term spending review as soon as possible to tackle these difficult systemic problems and enable departments to plan properly for the future.

“With today’s announced overspends, funding day-to-day spending remains a challenge. Labour was right to say there can be no return to austerity. If needed there are fairness-based and targeted tax reforms that can also raise revenues from those with the broadest shoulders, like increasing taxes on share buy-backs from highly profitable firms.

“Looking ahead, if you want the highest growth in the G7 – which would improve the public finances - you can’t also have the lowest investment in the G7 as we do at present. The chancellor’s fiscal rules still leave space to raise the productive capacity of the British economy through public investment. It’s right that all spending and investment be examined to ensure they provide genuine value for money and help to draw in private sector investment.”