IFS urges 'clearer strategy' on spending
Britain’s social security bill will rise to almost a third of all public spending by 2018, despite the Government’s planned cuts to welfare, an IFS report says.
The think-tank’s Green Budget 2013 warns the Chancellor must set out a “much clearer strategy” on social security spending and tax rises if he is to reduce borrowing in the next parliament.
The Government’s commitment to protecting spending on pensions will see the social security bill rise over the next five years, despite cuts to working-age benefits, their report says.
The IFS also call on the Government to reform the tax system, and remove exemptions for business assets and gifts from inheritance tax.
“If taxes are to rise, or social security spending is to be cut, then a much clearer strategy should be set out,” IFS director Paul Johnson said.
“There are important ways in which the tax system could be made more efficient and be reformed to bear more heavily on “the rich”, but there are also damaging options.
“Social security spending is growing as a proportion of total spending and it can create unwelcome incentives. But cutting it will inevitably often hit the vulnerable.”