By Ed Conway, Economics Editor
Britain still faces years of "colossal" Government spending cuts that will completely transform the nature of the economy, the Institute for Fiscal Studies has warned.
Speaking a day after the Autumn Statement, the independent analysts underlined the scale of the austerity plans revealed by the Treasury.
They pointed out that there are still £21bn of cuts or tax rises left to meet George Osborne's 2019/20 targets.
IFS director Paul Johnson said that if the NHS, schools and international development remain ring-fenced from real-terms cuts, unprotected departments, including the Home Office, Business and Culture departments, will face cuts of 41%.
"One thing is for sure," he said. "If we move in anything like this direction, whilst continuing to protect health and pensions, the role and shape of the state will have changed beyond recognition."
He pointed out that on this basis, by 2019 a third of all state spending would go on health and state pensions alone – compared with a quarter just before the crisis.
The comments came amid growing consternation about the scale of cuts pencilled in for after the election.
Although none of the major parties have sketched out their manifestos, Wednesday's OBR numbers are critical in laying out the scale of the work that may need to be done in future years to balance the books.
The IFS said that so far the Government had achieved £35bn of cuts, but that it still had to cut a further £55bn from its departmental budgets.
However, this is based on Mr Osborne's aspiration of achieving an overall budget surplus within four years, a plan which is not shared by his Labour counterpart Ed Balls.
Paul Johnson said: "How do we get to this sunlit upland in which we have a budget surplus?
"Spending cuts on a colossal scale is how, taking total Government spending to its lowest level as a proportion of national income since before the last war."
In its report, the Office for Budget Responsibility pointed out that by 2019/20 the size of the Government would be down to the smallest level in around 80 years. The speed of the cuts would be unprecedented during peacetime.
The IFS also said that while Mr Osborne's reforms to Stamp Duty were welcome, they did not go far enough.
"Transaction taxes such as Stamp Duty are highly inefficient however they are designed, and the truth is Stamp Duty will continue to become a more important revenue raiser not a less important one even after these changes," said Mr Johnson.
"This is most certainly not the substantial overhaul of the taxation of housing we need."
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