Hunt's £20 billion Budget shortfall leaves scrapping national

BRITAIN’S public services other than health, defence and education face a £20 billion shortfall in Jeremy Hunt’s pre-election Budget, top economists said today.

- Jitendra Joshi

Institute for Fiscal Studies director Paul Johnson challenged several assumptions on which the Chancellor based his tax and-spend plans yesterday, including eye-wateringly tight projections for Government departments, and economic growth forecasts based on net migration rising, not falling.

“Making the numbers work in the overall Budget is predicated on very, very tight spending plans when he wants to protect health and education, and eventually raise defence spending to 2.5 per cent of national income," Mr Johnson told the Standard.

"Against that backdrop, the idea of abolishing national insurance is for the birds," he said, after Mr Hunt lopped another 2p off national insurance and said he wanted to scrap double taxation of workers on top of income tax.

Reducing national insurance remained preferable to more expensive cuts to income tax, Mr Johnson said, after Tory Right-wingers had urged Mr Hunt to go further.