More Cuts 'Needed' As Bosses Demand Spending
The cost of supporting Britain's ageing population means the country must find another £40bn in spending cuts or tax rises, the country's official forecaster has warned as business leaders demand more spending to boost the economy.
The independent Office for Budget Responsibility (OBR) issued the estimate while outlining its annual Fiscal Sustainability Report which described Britain's long-term fiscal outlook for the next 50 years as "clearly unsustainable."
It calculates a £39bn shortfall - down from £45bn forecast last year - will need to be found from 2017/18 onwards just to deal with people living longer.
It has previously warned that growing health, social care and state pension costs - caused by greater life expectancy - will set off on an "unsustainable upward trajectory."
Today's report also provided an update on the true state of the nation's finances, taking into account the cost of public sector pension promises, private finance initiatives, nuclear decommissioning and support for the banking sector.
It put the total cost of public sector pensions at £960bn - a fall of £175bn on last year - which the OBR said was due to the Government's decision to link pension payments to the CPI measure of inflation from the usually higher RPI.
Chancellor George Osborne is likely to seize on the report as evidence for the need to press ahead with his tough programme of austerity measures, which include hundreds of thousands of job losses, an overhaul of the welfare system and a higher pension age.
Labour has argued that the extent of the cuts is killing the prospect of economic growth through a recession 'caused in Downing Street' and Mr Osborne should change course to support jobs and therefore grow tax revenues.
The opposition's position is supported today through attacks on the Government over the lack of growth.
Frustration boiled over for the director-general of the CBI in an interview with the Financial Times.
John Cridland accused the Government of failing to secure "momentum and urgency" on plans to kickstart the recovery.
The business lobby group's head told the newspaper that ministers appeared to be "dazzled in the headlights", resulting in a lack of progress on the growth strategy set out by Mr Osborne seven months ago.
He asked: "Where are the diggers"?.
His question was seemingly answered by the bosses of the UK's biggest construction companies, who have written to the Daily Telegraph to also criticise the Government for a lack of investment.
There was also another letter to a newspaper from business and trade union leaders, complaining about indecision with Government over aviation policy.
Signatories to the letter in The Times, including Virgin boss Sir Richard Branson and TUC leader Brendan Barber, warned that Britain's international competitors risked overtaking the country in terms of business opportunities.
Ministers had been due to publish the consultation on expanding airports in south east England today but it was delayed amid reported disagreements in the coalition.
what do you think?
Most of the current ageing population have paid contributions for about fifty years, but the government have wasted it.
Ronald George Halliday
Here we go again. Panickmongering. why not just create more jobs at a reasonable salary, cut the large payouts and bring a sensible way of life back. High flyers have created this world and robbed everybody blind. More taxation creates less jobs. Why not go the other way and reduce costs, to what people can afford today.
Cut, cut, cut! Yet the deficit continues to rise. The one thing that must be cut is overseas aid. We are giving away money we don't have to countries that either don't need it or don't pass it on to their people, while at the same time cutting our armed forces to dangerous levels.
So Osbourne gives 12 billion on overseas aid, and has given 60 billion to quango redundancies, and is giving 2 trillion in benefits to migrants and immigrants. He is also giving 1 trillion to the public sector pensions but wants the private sector to pay for everything. He has borrowed in 2 years 1.5 trillion which is more than any chancellor has done in 1000 years in total. He now wants to give billions more to civil serants so he should now be arrested and charged with High Treason. I paid to the country over £100,000 but mt state pension will be £7000 a year so to get it back i would have to live for over 200 years more. He will get a pension of £60,000 plus a state pension and he pays in about £10 a year.
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look on YouTube Osborne saying there is no deficit . he s conned the lot of you
A sure sign that a Tory government has got it wrong when bosses and union leaders both sign the same letters condemning their policies.
well said john
Tax avoidance by the big boys costs the country 95 billion !!! start by chasing that up first Osborne you muppet before you start putting even more misery on the working man.........................Oh no silly me can't do that cos they are the herberts that vote for you aren't they ,can't go upsetting them now can we ? .Just easier to hurt the peasants more isn't it .Creep.
"Ministers had been due to publish the consultation on expanding airports in south east England today but it was delayed amid reported disagreements in the coalition." Anything run be a committee never works - too many looking after their own interests at the expense of all
Successive Governments have failed to deal with this problem knowing to do so will lose the the next general election Following the turner report of 2005, labour had the oppertunity to tackle this during their term in office but took their usual stance - Ignore it as its likley to loose votes and hope it goes away. Short term policies with on eye on the next general election have done no one any favours All parties need to sit down and agree a policy on the best way forward for all As long as there is party politics that serve the interest of the party and not the country there will be no way forward and necessary unpopular decisions will not be made Higher pensions will come at a price - how many are prepared or are able to pay it