Category Archives: Institute for Fiscal Studies

Next government faces hard choices on English universities, say experts

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Ministers left with unpalatable options of raising tuition fees, making grants or capping student numbers, says IFS

The next government faces “unpalatable” choices between raising tuition fees, making direct grants or capping student numbers to rescue universities in England from their financial black hole, the Institute for Fiscal Studies has warned.

The thinktank said universities that relied on teaching UK students for the bulk of their income were most vulnerable, calculating that undergraduate tuition fees would now be £12,000 if they had kept pace with inflation, rather than the £9,250 rate frozen since 2016.

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Tory government ‘worst in postwar era’, claims expert study – as it happened

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Sir Anthony Seldon leads analysis that concludes that equality, growth and the UK’s standing in the world have all declined since 2010

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And here are some of the best pictures from yesterday’s campaigning. As more voting people than ever appear poised to turn away from the Tories, Sunak appeared in several photographs with sheep and lobsters as he visited North Devon, held by the Tories since 2015. The Guardian’s Archie bland named the sheep the “Dubious photo opportunity of the day”, after the sheep ran away:

Starmer, meanwhile, appeared on LBC where he clarified that Premier League Football Clubs would not be subject to a 10% transfer tax to fund clubs lower down the pyramid. “Let me just kill it dead, we’re not looking at that,” Starmer said. He also visited a tennis club and a pub in Reading West and mid Berkshire.

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‘Glacial’ progress on levelling up in UK means more resources needed, says thinktank

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Institute for Fiscal Studies praised Conservatives’ ambition but said by some measures gap had widened

Progress towards a series of levelling up goals set by the UK government has been “glacial”, and achieving them by the target date of 2030 will require a big increase in resources for struggling areas, a leading thinktank has said.

The Institute for Fiscal Studies (IFS) said that, on many measures, regional inequality had widened and the UK had gone into reverse.

The share of pupils in England meeting expected standards at the end of primary school dropped from 65% in 2018–19 to 60% in June 2023, against a target of 90% by 2030. In only 10 English local authorities – all in London – did at least 70% of 11-year-olds meet this target.

The total number of further education and skills courses completed in England fell by 14% between 2018–19 and 2022–23. In the lowest skilled areas, the decline was almost 20%. The goal for 2030 is to have 200,000 more people successfully completing high-quality skills training annually, driven by 80,000 more people completing courses in the lowest skilled areas.

A 21-percentage-point gap in the average employment rate between the best and worst-performing local authority areas in the UK – the widest it has been since at least 2005. The aim is to have rising pay, employment and productivity in every area of the UK, and a smaller gap between the top performing areas and others.

The Conservatives’ aim is for local transport connectivity across England to be significantly closer to the standards of London, but the gap between the use of public transport in London (39% of journeys) and in the rest of the country (7%) during 2022-23 was at its second-widest level since 2002–03, as passenger numbers failed to recover to pre-pandemic levels.

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Starmer faces further calls for Labour to axe two-child benefit cap

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IFS research shows 670,000 more children will be hit by policy by end of next parliament if limit stays in place

Keir Starmer is facing renewed pressure to scrap the two-child benefit limit, as research reveals that 250,000 more children will be hit by the policy over the next year alone.

Labour’s manifesto for government, published last week, included the promise of an “ambitious strategy to reduce child poverty”, but no mention of the two-child limit.

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General election live: Green party defends ‘ambitious’ spending plans at manifesto launch

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The Greens’ spending commitments include £50bn for the NHS and £29bn to insulate homes

In an interview with ITV due to be broadcast on Wednesday evening, Rishi Sunak says he went without “lots of things” as a child, including Sky TV.

Sunak was pressed in the interview by the ITV journalist Paul Brand to give examples of things he didn’t have a child to which he replied: “There’ll be all sorts of things that I would’ve wanted as a kid that I couldn’t have. Famously, Sky TV, so that was something that we never had growing up actually.”

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Harder to own your first home under the Tories, Rishi Sunak admits – UK politics as it happened

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PM acknowledges in BBC Panorama interview to air tonight that it is a challenge for people to buy their first home

Davey sums up the Lib Dems’ plans on health and social care

And he says he wants to mention one other policy he is particularly proud of – the proposal to give proper bereavement support to parents whose partners have died.

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Starmer says Sunak ‘revealed character’ by lying about Labour’s tax plans – UK politics live

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Labour leader says PM’s tactics in Tuesday night TV debate show he is dishonest when put under pressure

Ed Davey, the Lib Dem leader, has been fined for speeding after being caught doing 73mph in a 60mph zone on the M1, PA Media reports. PA says:

Details of the case, dealt with under an administrative system called the single justice procedure, were revealed by the Evening Standard newspaper.

Davey wrote a letter of explanation in which he said he had tried to pay a speeding ticket issued by Bedfordshire police after he was caught speeding on the M1 near Caddington.

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General election: Starmer and Sunak clash over taxes, the NHS and immigration in head-to-head TV debate – as it happened

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Labour leader says prime minister’s claim he would raise people’s taxes by £2,000 is ‘nonsense’

The Guardian’s visuals team has produced an interactive boundary map for the UK general election which shows you if your constituency has been altered because of boundary changes. You can check it out here:

Ed Davey has been speaking about his party’s plan to provide free personal care for adults. The Liberal Democrats leader said he wants carers to have a special, higher minimum wage.

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English pupil funding at same level as when Tories took power, study finds

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Real-terms funding per pupil at 2010 levels, teacher pay at 2001 levels, and building investment 25% below mid-2000s

Spending on each schoolchild’s education in England has suffered an unprecedented 14-year-freeze since the Conservatives came to power, according to Britain’s leading economics thinktank.

Funding per pupil is now at 2010 levels in real terms, the Institute for Fiscal Studies said in its latest analysis of school spending, while teacher pay was at about the same real-terms level as in 2001.

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Tory national service policy would leave UK’s poorest areas worse off, IFS warns

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Thinktank says proposal to pay for scheme by scrapping shared prosperity fund would downgrade efforts to level up country

Rishi Sunak’s election pledge to introduce mandatory national service would leave the UK’s poorest regions millions of pounds worse off, a thinktank has warned.

The prime minister announced last weekend that if he was re-elected, every 18-year-old would have to spend time in a competitive, full-time military commission or spend one weekend a month volunteering in “civil resilience”.

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NHS spending rise lags behind Tory funding pledges, IFS finds

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Thinktank says extra funding eaten up by higher inflation despite greater demand with service in poor state of repair

Spending on the NHS in England has risen less quickly than the Conservatives promised at the last election despite the extra demand created by the pandemic and record waiting lists, a leading thinktank has said.

The Institute for Fiscal Studies (IFS) said increases in funding from the government had been eaten up by higher than expected inflation and, as a result, NHS day-to-day spending had grown by 2.7% a year during the current parliament – below the 3.3% pledged by Boris Johnson in 2019.

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UK politics: Sunak refuses to say how abolition of national insurance would be funded – as it happened

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PM says ‘people trust me on these things’ and refuses to be drawn on whether government would forgo entire £46bn raised from measure

Keir Starmer has accused Jeremy Hunt of repeating the budget mistakes made by Liz Truss during her disastrous premiership.

In comments on the budget during a visit to a building site this morning, Starmer focused on Hunt’s proposal to abolish employees’ national insurance over time, saying that this was a bigger unfunded tax promise than those in Truss’s mini-budget. (See 9.28am.)

How humiliating was that for the government yesterday?

We’ve argued for years that they should get rid of the non-dom tax status, they’ve resisted that. And now, completely out of ideas, the only decent policy they’ve got is the one that they’ve lifted from us.

Nothing that Jeremy Hunt did yesterday, nor anything the OBR said, changes anything very significantly. Which is a shame. Because that means we are still:

-heading for a parliament in which people will on average be worse off at the end than at the start,

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NHS waiting lists falling but will stay above pre-Covid levels until 2030, IFS says

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Length of time patients must wait for A&E care, diagnostic tests, cancer care and surgery will remain high, report predicts

The NHS hospital waiting list will be falling “consistently” by the time of the general election but will remain even larger than it was before Covid until 2030, a new report predicts.

In potentially good news for Rishi Sunak, the Institute for Fiscal Studies (IFS) said the waiting list for operations in England is expected to “start to fall consistently but slowly from the middle of 2024”, during the months leading up to the election, which is widely expected in November.

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Rishi Sunak says his ‘working assumption’ is that general election will take place in second half of 2024 – UK politics live

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PM appears to rule out spring election after recent speculation it could be held in May

Starmer says being in opposition is frustrating, and he accuses the Tories of treating it as performance art.

He is now on the passage about his career in public service that was posted earlier. See 9.12am.

If you’ve been breaking your back to keep trading, steering your business through the pandemic, the cost-of-living crisis, the challenge of Brexit and the chaos of Westminster.

If you’ve been serving our country, whether in scrubs or the uniform of your regiment and what you want now is a politics that serves you, then make no mistake - this is your year.

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OBR halves UK growth forecast and warns inflation will exceed 2% target until 2025

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Despite £27bn windfall for the autumn statement, government forecaster warns of generally more difficult outlook until 2028

The government’s official forecaster has slashed its predictions for economic growth over the next two years, and warned that inflation could take until 2025 to come back to the official 2% target.

In an updated financial health check to accompany the autumn statement, the Office for Budget Responsibility (OBR) said a more resilient economy this year had handed the chancellor a £27bn budget windfall, but it warned of a more difficult outlook up to 2028 than previously forecast at the time of the budget in March.

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Jeremy Hunt faces red wall revolt if he delivers ‘a budget for the rich’

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The chancellor’s potential inheritance tax cut in Wednesday’s budget would aid millionaires amid a cost of living crisis

Jeremy Hunt faces a backlash from “red wall” Tory MPs if he uses a fiscal windfall of up to £20bn to deliver tax cuts for the rich rather than to help ordinary families with the cost of living, the Observer has been told.

The chancellor and Rishi Sunak are this weekend finalising an autumn statement on Wednesday that could include a major reduction in inheritance tax – four-fifths of which would benefit those with more than £1m at their death, according to a new report from the Institute for Fiscal Studies (IFS). Each person with more than £1m would receive an average tax cut of £180,000, the IFS states.

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Tories have no room for tax cuts despite £52bn a year stealth rise, says IFS

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UK stuck between weak economic growth and risk of persistently high inflation, says thinktank

The government has no room for unfunded pre-election tax cuts despite having pushed through a “colossal” £52bn a year stealth raid on household incomes on Rishi Sunak’s watch, the Institute for Fiscal Studies has warned.

Britain’s foremost economics thinktank said the dire state of the public finances meant that attention-grabbing tax cuts risked stoking inflation, leading to higher Bank of England interest rates and a lengthy recession.

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Scrapping inheritance tax would cost £15bn a year by 2032, says IFS

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Thinktank carried out analysis as calls mount among Tory MPs for the tax to be abolished

Scrapping inheritance tax would cost the government almost £15bn a year in lost revenue by 2032, according to analysis by the Institute for Fiscal Studies that follows calls from Tory MPs for the main tax on inherited wealth to be abolished.

The thinktank said the latest figures from HMRC showed fewer than 4% of estates paid inheritance tax (IHT) in 2020–21, but the rapid growth in wealth among older individuals meant this number was set to rise to more than 7% over the next decade.

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HS2 may end up as ‘total waste of money’, warns IFS thinktank – UK politics live

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Comments from Paul Johnson of Institute of Fiscal Studies come as Downing Street hints at delay to work on second phase of rail link

Around 20,000 university workers are out on strike this week at more than 50 universities across the UK, despite a dramatic last-minute scaling back of industrial action.

Strikes had been set to go ahead at 142 UK universities this week as part of a long-running dispute over pay and working conditions, but it emerged last week that two thirds of branches of the University and College Union (UCU) had declined to take part.

Davey said the Lib Dem commitment – dating back to 1992 – to raise income tax by 1p to improve public services is unsustainable in the current economic climate. Originally the money raised was earmarked for education, but at the last election the party said it would use it to fund the NHS.

Speaking from Bournemouth to broadcast studios, Davey suggested the burden should instead fall on companies making “huge profits” while people struggle with the cost of living.

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Scottish public spending deficit falls as oil revenues hit record high

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Both sides of constitutional debate use Gers data to argue case for and against independence

Scotland’s public spending deficit has fallen from a record peak last year, as oil and gas revenues reached their highest-ever level after a global rise in oil prices.

The government expenditure and revenue Scotland (Gers) report calculated a per-person deficit – the gap between the amount raised through all tax and spending on all public services – as £1,521 in the 2022-23 financial year, down from £2,184 the previous year.

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