‘Not credible’: neither Tories nor Labour are being ‘honest’ about spending plans
Leading think-tank casts doubt on main parties’ manifesto pledges
Neither the Tories nor Labour has offered a “properly credible prospectus” for public spending in their general election manifesto, the Institute for Fiscal Studies (IFS) has said.
The Financial Times reports that IFS analysis found voters had a choice between “a do-nothing Conservative party that was likely to break its manifesto promises” and “radical Labour and Liberal Democrat policies that would not be achievable in one parliament”.
Here is what the IFS analysis said about each party’s spending promises.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
What does the analysis say about the Conservatives?
The IFS report concluded that the chances of the Conservatives being able to keep spending down over a five-year parliament in the way they have pledged is “remote”.
Director of the IFS, Paul Johnson, said that the Tories have been “immensely modest” in their proposals because to do anything else would require reneging on their pledge to balance the current budget. He added that proposing anything more wide-reaching “would mean being up front about the need for tax rises to avoid breaking that pledge”.
According to The Independent, the IFS analysis found the Tory manifesto promises “no more austerity… but [has] an awful lot of it baked in”, and that it would leave spending on public services other than health 14% lower in 2024 than when austerity began in 2010.
The IFS also said that Boris Johnson’s spending pledges are built on the need to complete the Brexit trade transition by the end of 2020; if it is not done on time it risks disrupting the economy. The prime minister’s pledge to leave without a deal if one is not agreed by the end of December 2020 is described by the report as another “die in a ditch style promise”.
The Tories have pledged to spend an additional £3bn in total on public services, and have committed to raising the threshold at which workers start paying National Insurance contributions from £8,628 a year to £9,500 – eventually rising to £12,500.
What about Labour’s plans?
The Independent notes “the vast gulf between cautious Tory plans which offer little change and radical Labour… proposals”, with the IFS report stating: “Rarely can a starker choice have been placed before the UK electorate.”
The IFS says that Labour would not be able to deliver on its promise to raise investment levels by £55bn a year as the public sector does not have the capacity to “ramp up” that much that quickly.
It also adds that the chances a Labour government would have to find other tax increases beyond those it has announced for big business was “highly likely”. The report says: “It is highly likely that Labour, at least over the longer-term, would need to implement other tax raising measures in order to raise the £80bn of tax revenue that they want.”
The Financial Times reports that Labour sticking to its proposals “would clearly increase taxes for many millions outside the top 5%”.
However, the IFS report also notes that Labour’s plans are “not so dissimilar to those seen in many other successful Western European economies”. “Labour’s proposed increase in the size of the state would still leave UK public spending at a lower share of national income than that seen in Germany,” the report adds.
And the Liberal Democrats?
The Lib Dem manifesto is the only set of pledges that “would appear to put debt on a decisively downward path”, according to the IFS.
The report does, however, note that “if you want big increases in taxation and spending then Labour and the Liberal Democrats have plenty to offer”.
The Lib Dem manifesto says that staying in the EU would give the UK a £50bn “Remain bonus” that a Lib Dem government would spend on public services. The party is also pledging to raise specific taxes for specific policies – so, for example, an air passenger duty rise would help pay for the fight against climate change. This is part of its bid to cut government borrowing.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Joe Evans is the world news editor at TheWeek.co.uk. He joined the team in 2019 and held roles including deputy news editor and acting news editor before moving into his current position in early 2021. He is a regular panellist on The Week Unwrapped podcast, discussing politics and foreign affairs.
Before joining The Week, he worked as a freelance journalist covering the UK and Ireland for German newspapers and magazines. A series of features on Brexit and the Irish border got him nominated for the Hostwriter Prize in 2019. Prior to settling down in London, he lived and worked in Cambodia, where he ran communications for a non-governmental organisation and worked as a journalist covering Southeast Asia. He has a master’s degree in journalism from City, University of London, and before that studied English Literature at the University of Manchester.
-
The week's best photos
In Pictures Firing shells, burning ballots, and more
By Anahi Valenzuela, The Week US Published
-
Damian Barr shares his favourite books
The Week Recommends The writer and broadcaster picks works by Alice Walker, Elif Shafak and others
By The Week UK Published
-
The Great Mughals: a 'treasure trove' of an exhibition
The Week Recommends The V&A's new show is 'spell-binding'
By The Week UK Published
-
John Prescott: was he Labour's last link to the working class?
Today's Big Quesiton 'A total one-off': tributes have poured in for the former deputy PM and trade unionist
By Harriet Marsden, The Week UK Published
-
Last hopes for justice for UK's nuclear test veterans
Under the Radar Thousands of ex-service personnel say their lives have been blighted by aggressive cancers and genetic mutations
By Sorcha Bradley, The Week UK Published
-
Will Donald Trump wreck the Brexit deal?
Today's Big Question President-elect's victory could help UK's reset with the EU, but a free-trade agreement with the US to dodge his threatened tariffs could hinder it
By Harriet Marsden, The Week UK Published
-
What is the next Tory leader up against?
Today's Big Question Kemi Badenoch or Robert Jenrick will have to unify warring factions and win back disillusioned voters – without alienating the centre ground
By Harriet Marsden, The Week UK Published
-
Is Labour risking the 'special relationship'?
Today's Big Question Keir Starmer forced to deny Donald Trump's formal complaint that Labour staffers are 'interfering' to help Harris campaign
By Harriet Marsden, The Week UK Published
-
What is Lammy hoping to achieve in China?
Today's Big Question Foreign secretary heads to Beijing as Labour seeks cooperation on global challenges and courts opportunities for trade and investment
By Harriet Marsden, The Week UK Published
-
Men in Gray suits: why the plots against Starmer's top adviser?
Today's Big Question Increasingly damaging leaks about Sue Gray reflect 'bitter acrimony' over her role and power struggle in new government
By Harriet Marsden, The Week UK Published
-
Who will replace Rishi Sunak as the next Tory leader?
In Depth Shortlist will be whittled down to two later today
By The Week UK Last updated