MercoPress. South Atlantic News Agency

UK Chancellor warned about spending cuts and budget deficit targets

Chancellor Alistair Darling must find additional cuts of £ 36 billion, according to the influential Institute for Fiscal Studies

United Kingdom Chancellor Alistair Darling was warned he must find £36 billion in new spending cuts if the British Government is to meet its commitment to halve the budget deficit over the next four years.

The influential Institute for Fiscal Studies (IFS) said the figures in Mr Darling's Pre-Budget Report (PBR) implied “severe cuts” across departments such as housing, transport, higher education and even defence.

The squeeze was so tight it could mean that all of Labour's increase in public spending since it came to power in 1997 would have unwound by 2018.

Earlier, Mr Darling acknowledged Britain was facing “a tough few years” but denied the country was heading for a decade of austerity. However Tory leader David Cameron accused the Chancellor and Gordon Brown of behaving like a pair of joy-riders “smashing up” the economy and not caring about the mess they left behind them.

In its analysis of the PBR, the IFS said that departmental spending cuts of £36 billion would have to be found in the three years from April 2011 on top of the £15 billion in efficiencies and cost savings already announced.

Between 2011 and 2013 pledges to protect health and education spending as well as meeting overseas aid commitments meant cuts of £25.5 billion - or 6.4% over and above inflation - would fall on other departments. “That really is quite grim,” said IFS deputy director Carl Emmerson.

“The Government has said that it won't cut most of the NHS budget, it won't cut most of the schools budget, and there are other things that it wants to protect as well, so of course for the rest of government, the things not protected, the cuts are very, very deep.”

The IFS estimated that Mr Darling had only a six-in-ten chance of complying with his own legal responsibility to halve the £178 billion deficit within four years, based on the accuracy of previous Treasury forecasts and no further policy tightening.

Overall, it calculated that an extra £76 billion, the equivalent of £2,400 per family, would have to be found over the course of the next two parliaments in order to restore the public finances. It also warned that debt levels could remain high “for a generation” - at about 60% of national output - without policies to tackle the impact of the ageing population on the public finances.

Mr Darling, however, insisted it was possible to “steadily” lower borrowing levels over the coming years. “This is a big country. We should be ambitious about the future. I do think we can get growth - provided we do the right things - we can secure jobs, we can compete with the rest of the world,” he told the BBC Radio 4 Today program.