IFS: Neither Labour nor the Conservatives have "credible" spending plans
The Institute for Fiscal Studies has said that the spending plans outlined in both the Labour and Conservative manifestos ahead of December’s general election are "not credible".
The IFS deemed it "highly likely" that Conservative spending would exceed that suggested in their manifesto, adding that Labour would be unable to deliver on its spending promises.
IFS director Paul Johnson said that both parties were being dishonest with the electorate, with the Tories in denial over tax rises being needed in order to "secure decent public services", while Labour are simply "pretending that huge increases in public spending can be financed by just big companies and the rich".
Johnson went on to highlight that the 2017 Conservative election manifesto had pledged more spending cuts and further austerity measures, but public service spending has since increased in reality and is on track to be roughly £27 billion higher in 2020 than their 2019 manifesto implies.
With regards to the Labour manifesto, Johnson pointed out that Jeremy Corbyn’s spending pledges have gone up from £50 billion in the party's 2017 manifesto to £80 billion in the 2019 document. Meanwhile, according to Labour's promises, investment spending would go up by £55 billion per year and taxes by £80 billion, which would see the national debt increase by around three per cent of national income.
Johnson said: “Their [Labour’s] vision is of a state with a far greater role than anything we have seen for more than 40 years. They would tax and spend more than ever before, putting in place a new universal welfare state with free childcare, free university, free personal care, free prescriptions and more besides; they would impose a swathe of new labour market regulations.
"In reality, a change in the scale and the scope of the state that they propose would require more broad-based tax increases at some point."
Johnson then took aim at Conservative pledges not to raise income tax, national insurance or VAT over the next five years, calling it an "ill advised" policy.
He also raised concerns that the Conservative plans for Brexit could also lead to economic harm, given prime minister Boris Johnson's intent to cut-off the Brexit transitional period at the end of 2020 even if a free-trade agreement with the EU has not been agreed by then.
This scenario, according to Paul Johnson, would be akin to a 'no deal' and "harm the economy and of course increase the debt and deficit".
Overviewing the 2019 Conservative manifesto, the IFS director acknowledged that there were no explicit spending cuts mentioned unlike previous Tory manifestos, but other than some spending increases in health and education, he said there was "essentially nothing new" in what it proposed.
He added that the Conservatives had "failed to come up with any kind of plan or any kind of money" to provide for the social care sector.