BRITAIN'S ageing population and strained healthcare system mean an extra £19 billion of spending cuts or tax hikes are needed to combat an "unsustainable" pressure on public finances, the Coalition's independent forecaster has warned.
The Office for Budget Responsibility (OBR) said the UK Government would need to find the additional savings in the year to April 2019 on top of the current £153bn in austerity measures to get debt down to 40% of economic output.
If no action were taken, it warned, the burden of an ageing population in terms of pensions and healthcare would wipe out much of Chancellor George Osborne's spending cuts, leaving a £65bn hole in UK finances.
In its annual fiscal sustainability report, it said: "It is clear longer term spending pressures, if unaddressed, would put the public finances on an unsustainable path."
The OBR said the move to a single-tier state pension had slightly eased the pressure on public sector debt but that healthcare was the biggest spending pressure over the next 50 years.
It also suggested the UK could need millions more working age migrants in the next 50 years to reduce the pressure of an ageing population. This flies in the face of Prime Minister David Cameron's pledge to get net migration down to below 100,000 a year by 2015.
But the report stated: "Since migrants tend to be more concentrated in the working-age group relatively to the rest of the population, immigration has a positive effect on the public sector's debt dynamics."
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