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Gordon Brown’s record and challenges for future spending

Explore Gordon Brown's economic legacy, future spending plans, and international comparisons, outlining trade-offs in health, education, and poverty. Analyze spending increases and tax revenue growth under his tenure. Understand the structural budget balance and the upcoming spending review's challenges.

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Gordon Brown’s record and challenges for future spending

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  1. Gordon Brown’s record and challenges for future spending Robert Chote, Carl Emmerson, Chris Frayne and Gemma Tetlow Institute for Fiscal Studies

  2. Outline • How does Mr Brown’s bequest compare to the inheritance he received? • What plans will he leave for his successor? • Spending plans for the CSR period look tight • Some difficult trade-offs will be required between spending on health, education and poverty

  3. Brown’s inheritance and bequest

  4. Brown’s inheritance and bequest

  5. International comparison • Many other countries have strengthened their public finances even more • UK still has relatively big structural deficit • UK remains ‘mid-table’ when comparing government debt

  6. How has spending increased? Source: HM Treasury Note: Average annual increase 1996–97 to 2007–08

  7. Why have tax revenues gone up? Note: Increase between 1996–97 and 2007–08

  8. Why have tax revenues gone up? Note: Increase between 1996–97 and 2007–08

  9. Why have tax revenues gone up? Note: Increase between 1996–97 and 2007–08

  10. Why have tax revenues gone up? Note: Increase between 1996–97 and 2007–08

  11. Structural current budget balance: Brown

  12. Structural current budget balance: Brown vs Conservatives

  13. Structural current budget balance: Brown vs Conservatives

  14. The next five years

  15. A challenging spending review?

  16. What might the trade-off be? • Health spending • Wanless Review recommended minimum 4.4% annual growth in spending • Education spending • State school spending per pupil to match that in the private sector in 2005–06 • Child poverty • £4½ billion needed to meet 2010–11 target

  17. What increases might we have? 9 smaller departments Department for Constitutional Affairs Source: HM Treasury ; IFS

  18. What increases might we have? 9 smaller departments Department for Constitutional Affairs Source: HM Treasury ; IFS

  19. A trade-off between health and education?

  20. A trade-off between health and education? Labour to date

  21. A trade-off between health and education? Wanless recommendation = 4.4% Labour to date

  22. A trade-off between health and education? Wanless recommendation = 4.4% Labour to date Expected growth in national income = 2½%

  23. A trade-off between health and education? Wanless recommendation = 4.4% Labour to date Expected growth in national income = 2½%

  24. Conclusions • Public finances in a stronger position that Mr Brown inherited • £20 billion tightening expected over the next five years • £10 billion increase in tax, £10 billion cut in spending • CSR set to be very challenging • Additional money for child poverty to be found later?

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