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How to cut £90bn a year

The next government will have to slash spending and raise taxes. But what's the best way to save?

By David Halpern   July 2009

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In 2010 British public sector borrowing will be £175bn—more than the health and criminal justice budgets combined. The “structural gap” in our finances, after spending on the recession, is £90bn a year. And government figures now imply that reducing this gap will have to come mainly from cuts, not tax increases. The rows over public spending have barely begun.

Britain has been here before. The Institute for Fiscal Studies thinks our late 1970s fiscal hole was larger than today’s. Back then, our debts were eased by inflation and the windfall of…

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