Each and every family in Britain will have to pay £2,400 to help cut the debt problems caused by the nation’s huge deficit.
This figure highlights the true extent of the financial pain that families across the land will have to face, according to the Institute of Fiscal Studies (IFS).
The think-tank predicts that even families from poorer backgrounds, who may be struggling with their own debt management issues, look set to see their living standards suffer as a result of the proposed measures to be introduced by Chancellor Alistair Darling.
To protect the “ringfenced” areas of schools, hospitals and the police force, there needs to be drastic cuts in other budgets – such as housing, transport, defence and higher education budgets.
Cuts of around 7 per cent a year, 20 per cent over three years, indicate the harshest squeeze since the Second World War, tougher than anything in the austerity years of the 1970s or early 1980s.
After three years some government departments will see their real-terms budgets cut by a fifth, with subsequent job and pay cuts inevitable.
This may mean that many people working within public sector bodies, or those providing services into the public sector, see their household finances squeezed as cut-backs and other budget cuts trim available cash.
Even in the NHS – where total overall hospital spending is protected – Health Secretary Andy Burnham conceded that there will be real cuts in some hospital and GP budgets, along with a pay freeze for doctors and a slash-and-burn approach to management.
Ivan Cooper, Chairman at debt help experts Chiltern, said: “Budgets across Britain look set to be streamlined, meaning many people will need to consider their own financial position more carefully – to prevent any serious debt problems from developing.
“For people already affected by the recession, independent debt advice from a reputable DEMSA affiliated provider – like Hamilton Locke or Chiltern – is usually beneficial.”
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