UK's Osborne has 50% chance of hitting £10bn surplus target, says IFS

UK Finance Minister George Osborne came under fire on Thursday as a leading financial think tank said he had only a 50% change of delivering a £10bn surplus by 2020 and may have to raise taxes or slash spending to get there.

Osborne, who delivered his annual Budget on Wednesday, said he was still on track to meet his long-cherished goal despite missing his debt reduction targets, with the public finances facing a £56bn black hole over the next five years.

Last November he claimed he would be receiving a £27bn windfall, based on forecasts from the Office for Budgetary Responsibility (OBR). In order to deliver on his surplus pledge Osborne would have to manage a £30bn turnaround in Britain's finances in 2020, an achievement which the Institute for Fiscal Studies said was highly dependent on a thriving economy.

“Within his very tight rule he will probably get away with this this time round. But there’s only about a 50-50 shot that he’s going to get there,” Johnson told BBC Radio.

“If things change again, if the OBR downgrades its forecasts again, I don’t think he will be able to get away with anything like this. I think he will be forced to put some proper tax increases in or possibly find yet further proper spending cuts.”

Osborne has already missed his self-imposed targets for capping welfare spending and debt reduction. The OBR said he would have broken his third - reduction of the deficit - if he hadn't put off tax increases for companies, increased pension contributions for government departments, brought forwardexpenditure on infrastructure spending and slashed disability benefits.

The consensus among economic analysts is that Osborne has shuffled his pack to allow for more tax receipts and a further £3.5bn in spending cuts to turn the country's, and his own, fortunes around. He spent a good part of his speech to parliament on Wednesday blaming the previous Labour administration, which lost power in 2010, for much of the country's financial ills and stating: "We fix our plans to fit the figures; we don’t fix the figures to fit the plans."

This was a clear reference to former Finance Minister Gordon Brown, who was often accused of shifting the economic goalposts to meet his own political ends. Osborne now stands accused of doing exactly the same thing.

He faced further accusations of politicisation from furious Eurosceptic members of his Conservative Party over quoting the OBR as saying a British exit from the European Union in June's "leave or remain" referendum would damage the UK economy.

The OBR itself strenuously denied that it had taken a position either way, saying it had only analysed external information that suggested som disruption if Britain left.

“It is not for us to judge at this stage what the impact of ‘Brexit’ might be on the economy and the public finances,” it said in its Budget document.