Failure to act on spending 'will put us on road to bankruptcy'

BRITAIN is on the “road to bankruptcy”, a think tank is warning as ministers brace for Chancellor Rachel Reeves’s announcement on spending cuts.

- By David Williamson

The Centre for Policy Studies accuses Sir Keir Starmer’s government of dodging the chance to have a “fundamental reckoning with a state that overspends and underdelivers” as the June 11 spending review looms.

Its fiscal policy researcher Daniel Herring warned: “With Government debt approaching 100% of GDP and the tax burden at its highest peacetime level, the UK is on a road to bankruptcy.”

He claimed instead of rolling back spending and lowering taxes, “it seems as though the spending review will be nothing more than an attempt to make the sums add up on a Treasury spreadsheet”.

His warning comes as the Institute for Fiscal Studies said some areas will almost certainly “face real-terms cuts” unless the Government increases overall spending.

It claimed they would likely involve “reductions in public sector employment, public sector pay, and public services”.

The scale of the cuts can be reduced, according to the IFS, if the “NHS gets a low funding growth settlement”.

But it warned this will “make it much harder to achieve the Government's aspirations for reductions in waiting times”.