Voters have been left in the dark over how the major parties will be able to fund their spending commitments, a respected thinktank has said, offering just “thin gruel”.
The Institute for Fiscal Studies (IFS) took further aim at what it described as a “conspiracy of silence” from both the Conservatives and Labour on how they could meet the challenges they identify, such as reducing NHS waiting lists.
Launching its report on the crucial documents, IFS director Paul Johnson warned that spending on many public services would likely need to be cut over the next parliament unless government debt was to rise or taxes increased further.
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He pointed to pressure from a 60-year high in government debt levels at a time of a near-record tax burden.
Much of the blame for this was a £50bn a year increase in debt interest spending relative to forecasts, he explained, and a growing welfare budget in the wake of the COVID pandemic and cost of living crisis that followed Russia’s invasion of Ukraine.
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Labour manifesto versus the rest
“We have rising health spending, a defence budget which for the first time in decades will likely grow rather than shrink, and the reality of demographic change and the need to transition to net zero,” Mr Johnson said.
“Add in low growth and the after-effects of the pandemic and energy price crisis and you have a toxic mix indeed when it comes to the public finances.”
“These raw facts are largely ignored by the two main parties in their manifestos”, he declared, describing the information presented to voters as a “knowledge vacuum”.
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The main verdict on tax
“In line with their unwillingness to face up to the real challenges, neither main party makes any serious new proposals to increase taxes”, Mr Johnson said.
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What is in the Conservative Party manifesto?
“Consistent with their conspiracy of silence, both are keeping entirely silent about their commitment to a £10bn a year tax rise through a further three years of freezes to personal tax allowances and thresholds.
“Both have tied their hands on income tax, NICs, VAT and corporation tax. The Conservatives have a long list of other tax rises, and reforms, that they wouldn’t do. Labour have ruled out more tax options since the publication of the manifestos.
“Taken at face value, Labour’s promise of no tax increases on working people” rules out essentially all tax rises. There is no tax paid exclusively by those who don’t work. Who knows what this pledge is really supposed to mean,” he concluded.
What about the other parties?
The IFS said the Liberal Democrats had bigger tax and spend policies than Labour or the Conservatives.
It also determined that Reform UK and the Greens offered much bigger numbers but declared that what they propose is “wholly unattainable”, helping to “poison the entire political debate”.
Mr Johnson concluded: “The choices in front of us are hard. High taxes, high debt, struggling public services, make them so.
“Pressures from health, defence, welfare, ageing will not make them easier. That is not a reason to hide the choices or to duck them. Quite the reverse. Yet hidden and ducked they have been.”