As to the IFS’s yearly ‘Green Budget’ report, the government would need to significantly augment the £9 billion in tax increases mentioned in its manifesto in order to tackle the strain on public services.
The chancellor is expected to adhere to her budgetary rule, which stipulates that daily expenses must be covered by tax receipts. She cannot, therefore, raise her borrowing to close the difference.
On October 30, Rachel Reeves will introduce her first budget in the Commons.
The IFS director, Paul Johnson, stated that this budget may be “the most consequential since at least 2010”.
In its manifesto, the new Labour administration promised to raise government spending by £5 billion, and it is currently spending £9 billion to resolve pay conflicts in the public sector.
Labour would record a £17 billion surplus if it makes no more adjustments to the spending budget, which was laid out by the previous government in 2021.
These spending projections, however, are regarded as being utterly unrealistic and would entail actual term reductions to unprotected budgets.
