Labour and Tories accused of silence over cuts

Tough decisions would need to be made following the next election, the Institute for Fiscal Studies said. Labour says it will have to make future savings to public spending to fund some of its policies if it wins power. The state of the economy is under intense focus in the run-up to a general election that must be called before next January. Prime Minister Rishi Sunak refused to be drawn on the date of the general election.

He said his working assumption was for the public to go to the polls in the second half of this year. The IFS said the tax cuts announced in the Budget would not make up for the impact of tax increases and rising prices. Debt as a proportion of the size of the economy is at its highest level in 70 years. The next parliament could prove to be the most difficult of any in 80 years for a chancellor wanting to bring debt down.

Unprotected departments could face day-to-day cuts of up to £20bn. The last spending review was in 2021. The next one will take place in 2018. The last time the government reviewed its spending was in 2010.

The previous review took place in 2008, when the government was in the midst of its first recession. The current spending review will be in 2018, with the next one in 2019. Mr Hunt has defended the squeeze on public spending as realistic if schools, hospitals and the police increased productivity. Shadow chancellor Rachel Reeves has said Labour now intends to pay for its NHS and school breakfast plans through future savings to public spending if it wins power.

Labour had intended to use money raised from scrapping the non-dom tax regime, but Mr Hunt is now using this to help fund the cut to National Insurance. Budget would mean a net tax cut of £9bn is taking effect this year. But that was dwarfed by an estimated £27bn of tax rises that came into effect last year - and a further £19bn coming in after the election. More than three-quarters of the personal tax cuts go to the richest half of households.

The biggest group of losers are pensioners, who face an £8bn collective hit. The Resolution Foundation also said that the UK is heading for nearly 20 years of lost pay growth. After taking account of rising prices, the average wage will not regain its 2008 level until 2026.

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