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The Institute for Fiscal Studies (IFS) has warned that tax cut promises may need to be scrapped as a result of the UK being in an ‘unfortunate economic and fiscal bind’.

In a new report, the IFS said that whilst tax rises and cuts for public services are built into current government plans, public services are ‘showing signs of strain’ and are ‘performing less well than they were in 2010’.

The think tank also said that ‘everything is harder’ when the economy is growing slowly and public finances are more constrained.

In the report, the IFS stated: ‘It might be easy to announce immediate tax cuts without any hint of what it is the state currently does that it will stop doing, or what taxes will rise in future, but this trade-off cannot be wished away.’

A spokesperson for the Treasury commented: ‘The best way to deliver sustainable funding for public services in the future is to grow the economy – the UK has grown faster than France, Germany and Japan since 2010 and the Office for Budget Responsibility (OBR) says our action in spring and autumn will deliver the largest boost on record.’

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McBrides Chartered Accountants