The UK public finances remain under severe strain. Recession has been more severe than forecast and the rising tide of public debt is worrying politicians, businesses, bond markets, credit rating agencies and taxpayers alike. Taking tough decisions on both tax and spending will be critical to turning the tide of debt.
This publication addresses the strain on public finances due to the global financial crisis and the current recession, and makes recommendations for closing the fiscal gap of £26 billion, over and above budget projections by 2013/14. We set out options for restoring the public finances to health through a mix of spending cuts and tax increases that minimise damage to economic efficiency and protect the disadvantaged.