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SUMMARY

Chapter 1: THE UK'S PRODUCTIVE CAPACITY: SURVEYING THE DAMAGE

1.1 Introduction
1.2 Financial crises and the level of potential GDP
1.3 How fast will potential GDP grow beyond the crisis?
1.4 Conclusion

Chapter 2: FISCAL TIGHTENING: WHY AND HOW?

2.1 Introduction
2.2 Effect of the financial crisis and recession on the public finances
2.3 The fiscal policy response
2.4 Alternative timescales for the fiscal tightening
2.5 Conclusion

Chapter 3: FISCAL STIMULUS AND THE CONSUMER

3.1 Introduction
3.2 VAT changes
3.3 Car scrappage
3.4 Conclusion

Chapter 4: THE ECONOMIC OUTLOOK

4.1 Introduction
4.2 Demand: why such a sharp contraction?
4.3 The growth-inflation trade-off: why so bad?
4.4 The outlook for demand
4.5 Forecast scenarios
4.6 Conclusion

Chapter 5: THE PUBLIC FINANCES AND STERLING

5.1 Introduction
5.2 The origins of currency crises
5.3 The risks of another sterling crisis
5.4 Conclusion

Chapter 6: GREEN BUDGET PUBLIC FINANCE FORECASTS

6.1 Introduction
6.2 Short-term projections
6.3 Medium-term prospects
6.4 Alternative macroeconomic assumptions
6.5 The Budget judgement

Chapter 7: OPTIONS FOR FISCAL TIGHTENING: TAX INCREASES AND BENEFIT CUTS

7.1 Introduction
7.2 Options for increasing tax revenue
7.3 Cuts to social security benefits and tax credits
7.4 Conclusion

Chapter 8: PUBLIC SERVICES: DEEP CUTS COMING

8.1 Introduction
8.2 Trends in UK public spending
8.3 Overall outlook for Spending Review 2010
8.4 Departmental spending in 2011-12 and 2012-13: sharing the pain?
8.5 Departmental spending after 2012-13
8.6 Conclusion

Chapter 9: PUBLIC SECTOR PAY AND PENSIONS

9.1 Introduction
9.2 The public sector pay bill
9.3 Cutting pay, shedding jobs or both?
9.4 Cutting pay?
9.5 Cutting pensions?
9.6 Conclusion

Chapter 10: SUPPORT FOR RESEARCH AND INNOVATION

10.1 Introduction
10.2 The patent box
10.3 Direct spending on science and universities
10.4 R&D tax credits
10.5 Conclusion

Chapter 11: REFORMING UK FISCAL INSTITUTIONS

11.1 Introduction
11.2 The rationale for institutional reform
11.3 The Fiscal Responsibility Act
11.4 An enhanced role for the National Audit Office
11.5 An Office for Budget Responsibility
11.6 Conclusion

APPENDICES

Appendix A: Forecasting public finances
Appendix B: Headline tax and benefit rates and thresholds
Appendix C: Abbreviations

© The Institute for Fiscal Studies, January 2010

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