IPPR: UK public spending should be raised to European levels

23 Apr 19

The UK must become “more European” in its approach to public spending to end austerity, a think-tank has urged.

Aligning the UK’s public spending with similar countries like Germany and France would see total spend increase by £2,500 per person annually, according to analysis by the Institute of Public Policy Research.

IPPR analysis of OECD figures found that UK government spending amounts to 40.8% of GDP but the average stands at 48.9% for similar European countries.

Raising public services investment to 48% of GDP would mark a return to pre-2010 levels and spending on health, education and social security would increase by £1,800 per person annually, according to the analysis.

Comparing the UK to 11 similar European countries, IPPR noted that the UK was ranked the lowest for inequality and was one of the lowest for poverty and child poverty rates.

The comparator countries included: Austria, Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Spain and Sweden.

See a table below with OECD figures, comparing UK public services spending to the European average. 

IPPR suggested spending increases could be supported by raising taxation levels to similar level seen in these countries. It said that the countries typically raise more through corporate taxation and income taxation – including employee contributions to social security.

Harry Quilter-Pinner, senior research fellow at IPPR, said: “We may be leaving the EU, but in other ways we must become ‘more European’. Our neighbours have consistently invested more in welfare and public services and consistently deliver better social outcomes than us.

“We need a fundamental shift in our approach to investment in this country to deliver high quality social and child care, a life-long education system, 21st century healthcare and a properly funded benefits system.

“Ending austerity must be more than a political soundbite. Austerity has left our social safety net on its knees. It is morally wrong and economically illiterate to continue with the cuts.”

The Treasury has been contacted for comment.

Read shadow local government secretary Andrew Gwynne’s blog for PF demanding the government ends austerity.

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