We all know that the current government faced a huge fiscal deficit when it took office in 2010. It has spent the last few years implementing an ‘austerity’ programme, or fiscal consolidation, aimed at reducing that deficit. However, the economy has failed to grow as expected, and so the deficit has fallen far less than originally intended. One consequence is that spending cuts (or tax rises) on a scale similar to those implemented over this parliament will be required again over the next parliament.
But this isn’t another article about the fiscal consolidation as a whole. Rather I want to look here at what the consequences have been for public spending and the tax system.
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