The government's justification for upcoming UK tax rises and spending cuts is shaky, economists say.
BBC economics correspondent
The government previously used a different measure of debt, and going back to using that would leave £14bn to spare, they said.Media discussion of the government's tax and spending options ahead of the Autumn Statement has been dominated by a so-called "black hole" in the public finances, put at anything from £35bn to £60bn, which, it is assumed, must urgently be "filled" with spending cuts or tax rises.
These changes to forecasts and accountancy rules produce far bigger effects on the £50bn "hole" than any changes in spending and taxes the government is reported to be considering for the Autumn Statement. Changing the accountancy rule used to measure the government debt back to what it was before the Autumn Statement in 2021 completely removes the "black hole", according to the economists' analysis, putting government debt back on a sustainable footing.
"Further austerity will do far more damage than a 'fiscal hole' that disappears with tweaks to models or accounting rules."
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