The borrowing and spending plan of all of the main British parties in the general election leave voters “in the dark” about the spending cuts and tax increases that will necessary after May 7th, Britain’s leading economic organisation has warned.
In a sharply critical judgment, the Institute of Fiscal Studies said neither the Conservatives, Labour, the Liberal Democrats, nor the increasingly significant Scottish National Party, had "provided anything like full details" of their plans for each of the next five years.
The Conservatives plan to eliminate the UK’s overdraft in four years, but also plan tax cuts, while the welfare cuts they have already outlined produce a tenth of the cut they say they will deliver, the institute says.
The Conservatives’ borrowing figures are partially based on stopping £5 billion worth of tax avoidance, but they do not say where it will come from, £10 billion of welfare cuts, but, again, no details are offered, while £30 billion comes from departments, but, again, with no detail.
Election offerings
British chancellor George Osborne accepted that public scepticism and "fatigue" is growing about the election offerings of all parties.
In Yorkshire, in the constituency held by his Labour counterpart Ed Balls, Mr Osborne said British voters deserve "a clear explanation of the real choices on offer and the consequences for their jobs, their incomes, their mortgage bills and the stability of the British economy".
However, he then refused to give the missing details highlighted by the institute. “What we’ve got to do is continue for the next two years at the same pace the savings we’ve made over the last five years, and people can see how that has restored stability to our country.”
Meanwhile, Labour has been “considerably more vague about how much they would want to borrow”, pledging to ‘get a surplus on the current budget’ without specifying either exactly when or how much of a surplus.
If Labour, which has promised some tax increases on luxury homes, bankers’ bonuses and the like, can find £7.5 million from curbing tax avoidance, it might need to find just £1 billion – a tiny amount – from department spending and still stay inside their numbers.
Liberal Democrat plans are based on optimistic claims that they can find the welfare savings they need from cutting down on benefit fraud and getting the unemployed back to work, along with £10 billion from cracking down on tax avoidance.
The Scottish National Party received praise and criticism from the institute, which said that the SNP is “the one major party not to have used largely made up assumptions about how much they could raise from clamping down on tax avoidance to try to make their sums add up”.
Tax cuts are matched by tax concessions, it said. However, the SNP's plans – billed by its leader Nicola Sturgeon as marking the end of austerity – will actually see departmental spending "broadly frozen" for five years, it warned.
The SNP is planning the same fall in borrowing as Labour, but at a slower pace. However, the institute said in words that were seized on by Scottish Labour that Ms Sturgeon’s plans “imply a longer period of austerity”.
However, Labour and the SNP questioned the institute’ analysis. Ms Sturgeon said it had not given credit for extra revenues from higher taxes or tax avoidance curbs, and it had misunderstood the SNP’s borrowing plans. This point was rejected quickly by the IFS.
