Labour and Tories need to be honest about economic trade-offs, says IFS

Thinktank calls on parties to level' with voters about difficult tax and spending decisions before next election

Britain's next government faces some of the toughest tax and spending choices for generations as it will be forced to grapple with the impact of weak growth and high debt interest payments, a leading thinktank has said.

The Institute for Fiscal Studies (IFS) warned that Jeremy Hunt's much-predicted budget tax cuts risked being reversed or paid for by spending cuts, and urged the Conservative and Labour parties to level" with voters before polling day.

A large cut to public investment over the rest of the decade, which would still fall even if Labour's planned spending on its green prosperity plan was taken into account.

Tough funding constraints, with concentration of spending on priority areas such as the NHS, schools and defence, implying cuts of 20bn in other unprotected departments.

Plans by both parties to cut net migration to the UK had implications for the social care and higher education sectors, and neither party had talked about the higher care costs or the higher tuition fees for domestic students that would result from cutting numbers.

Progress towards achieving net zero had involved picking most of the low-hanging fruit and the next steps - such as reducing emissions from buildings - would involve short-term costs on businesses and consumers.

Spending on disability benefits was rising fast and required urgent attention, but previous efforts to rein in spending had struggled to achieve the stated objectives, while any general promises to cut spending would need to be accompanied by specific details as to who would lose out.