A PENSIONS black hole has been identified in the Tory Chancellor’s budget plan with figures emerging yesterday showing that the NHS and education budgets will be raided to the tune of £1.9 billion to pay for it.
Tory Chancellor Osborne announced in the Budget that employers would have to contribute more to pensions for NHS staff, teachers and the police. Figures show that as a result, health and education will be squeezed to pay for the extra public sector pensions costs.
House of Commons library figures obtained by the Liberal Democrats show the NHS will have to find an estimated £650m per year, and that education will have to find an extra £400m a year, to pay for the rise in pension contributions for teachers, doctors and nurses and NHS staff.
Armed Forces will be hit by more than £300m and police forces by more than £100m. Lib Dem leader Tim Farron said the cuts were being ‘sneaked through’ and would ultimately mean less money to spend on teachers, doctors and nurses.
Farron said yesterday: ‘It takes that money directly out of the front line of those services.’ Meanwhile the Institute for Fiscal Studies (IFS) warned that Osborne’s budget means years of austerity, well beyond 2020, wage cuts and a reduction in the standard of living for millions of families across the UK.
The Institute for Fiscal Studies’ brutal verdict on Osborne’s Budget concludes: ‘We should all be worried.’ Paul Johnson, director of the Institute for Fiscal Studies, said the Chancellor was running out of ‘wriggle room’ to deliver the budget surplus promised by 2020.
He went on to predict that there was only a 50/50 chance of him getting into the black. The IFS shot down the £27bn ‘windfall’ in the public finances which Osborne claimed to have ‘discovered’ in the Autumn Statement and highlighted the £56bn black hole in the Chancellor’s spending plans over the next five years, identified by the Office for Budget Responsibility (OBR).
Paul Johnson said: ‘What Mr Osborne didn’t tell us on Wednesday is that rather than finding £27bn the OBR lost £56bn down that same sofa. As it happens, the total loss to the sofa across the two fiscal events is £29bn.’
Shadow Chancellor John McDonnell said Osborne was ‘making it up as he goes along’. He added: ‘Millions will also be desperately disappointed to hear that George Osborne has had to continue austerity into the next decade and announce a further £10 billion of spending cuts just so he doesn’t lose any face.’
• Labour leader Jeremy Corbyn said yesterday that Labour will force a vote on the government’s plans to cut disability benefits. This is a vote that the government will lose, and could bring it down!