Huge decisions over the size and shape of the state will need to be taken by the next government, according to Institute for Fiscal Studies (IFS) director Paul Johnson.
Addressing a manifesto analysis briefing in Westminster, Mr Johnson said taxes are at the “highest level ever” in the UK yet public services are struggling.
Mr Johnson said: “Despite the high tax levels, spending on many public services will – on current plans – likely need to be cut over the next five years unless taxes are raised further or government debt raises ever upwards.”
On how such a situation has emerged, Mr Johnson said: “The answer is in large part a £50 billion increase in debt interest spending relative to forecasts and a pretty big growth in the welfare budget over the last few years. We've also got rising health spending, a defense budget which for the first time in decades is going to grow not shrink, and the reality of demographic change and the need to transition to net zero.
“Add in low growth and the after-effects of the pandemic and the energy price crisis and you've got a pretty toxic mix for the public finances. The two manifestos of the main parties essentially ignore these big challenges, these big facts that huge Decisions over the size and shape of the state will need to be taken, that those decisions will, in all likelihood, mean higher taxes or worse public services.
“You simply wouldn't guess from looking at their prospectuses or listening to the promises. They failed to even acknowledge some of the most important issues and choices facing us for a very long time. As the population ages these choices are not going to get easier.”