Finance minister Rishi Sunak aims to balance Britain’s public finances by relying 60% on tax rises and 40% on spending cuts, a sharp reversal of the government’s approach after the 2008-09 recession, the country’s budget watchdog said on Monday.
Sunak’s budget plans last week showed Britain’s budget deficit falling to 4% of gross domestic product in 2023/24 from a peacetime high of 19% of GDP in 2020/21, when borrowing paid for most of the financial cost of the COVID-19 pandemic.
“If you look at the ratio of this budget’s consolidation to what’s been done in the past, it’s about 60% being done by tax and about 40% being done through spending,” Office for Budget Responsibility (OBR) chairman Richard Hughes told parliament’s Treasury Committee.
“The last time you had a chancellor about to deliver a big consolidation, which was in 2010, a lot more was being done through public spending and less was being done through tax,” Hughes added.
Former finance minister George Osborne aimed for tax rises to account for just 20% of medium-term deficit reduction in his 2010 budget, with 80% of the work to be done by spending cuts.