Ignore Tory spin, Labour’s spending plans are the ‘most cautious’ according to the IFS

Tory accusations of unfunded spending commitments are flatly contradicted by the IFS.

George Osborne1j

Tory accusations of unfunded spending commitments are flatly contradicted by the IFS

In yet another sign of the General Election campaigns ramping up, the Conservatives will today accuse Labour of promising unfunded spending commitments of £20.7bn in the first year should they win the election in May.

The BBC has reported that five Tory cabinet members will say that Labour plans would amount to almost £1,200 extra borrowing for every working household in the UK.

Curiously, however, the Conservatives have failed to say how either figure was reached.

The accusations are presumably designed to hammer home the message that Labour still cannot be trusted to run the economy – as well as to solidify George Osborne’s lead over Ed Balls when it comes to who is the most trusted to run the country’s finances.

And yet the problem for the Tories is that their claims are flatly contradicted by the independent Institute for Fiscal Studies (IFS), which last month assessed the spending plans of the three main parties.

In fact, the IFS said (p.21) that Labour’s plans were the “most cautious”:

“Of the main parties, Labour has perhaps been the most cautious of the three in that, at least on the basis of its own costings, it appears to have managed not to announce an overall net giveaway. Just looking at tax and social security spending policies, Labour has announced a small net takeaway of 0.1 per cent of national income.”

Last year the IFS said that to meet its fiscal target the Conservatives would have to raise taxes or make even bigger cuts to spending than already proposed if they win power next year.

The independent research body noted that meeting the Conservatives’ fiscal target “would require tax rises or significantly greater cuts in public spending than Labour and the Liberal Democrats would require to meet their rules – on top of those that are already planned up to 2015–16”.

It also concluded that borrowing over this parliament was “on course to be substantially greater than the Office for Budget Responsibility (OBR) forecast back in June 2010”.

The three major parties are all committed to deep spending cuts after next year’s General Election, however the IFS has made clear that under a Conservative government the cuts in the next Parliament will be deeper unless they are offset by significant tax increases.

James Bloodworth is the editor of Left Foot Forward. Follow him on Twitter

6 Responses to “Ignore Tory spin, Labour’s spending plans are the ‘most cautious’ according to the IFS”

  1. AlanGiles

    Both parties sound increasingly shrill and desperate. Far from engaging with voters, five months of this childish nonsense will turn more people off. The truth is you can barely get a sheet of Bronco between the big two’s policies.

  2. Penfold187

    The CONservatives, have a major flaw in their fiscal approach. There rhetoric harks backs to the failed theory of ‘trickle down’ economics. Tax is not a burden, but a social responsibility! You generate profits, more power to you. But you built that business using the skills government paid for in education, move your product using facilities and infrastructure government paid for, kept your place of business secure thanks to the police and security services, government paid for. Is too much to ask that you contribute towards this expenditure, if only because it benefits you?
    Yet we currently have a perception of tax, as paying for the lives those who can’t bothered the scroungers and lazy. Benefits are a large proportion of expenditure certainly, but much of that expenditure is too the WORKING poor. Government is subsidising private industry!
    Osbourne talks of the transformative effect of work and making work pay. He would be right if he actually made policy to ensure work paid, his policies ensure that those with the least pay the most proportionally. One of his first actions was to raise the level of the MOST regressive tax he could, VAT. Thus ensuring those with the least, paid proportionally more of their income than everyone else.

  3. Leon Wolfeson

    The problem is they’re “cautious” – i.e. seeped in massive austerity and are hence designed not to allow a recovery.

  4. treborc1

    We have had this all before have we not after recessions, we would get arguments of which party would cut the most, normally labour would lose.

  5. Guest

    That is pure nonsense, Labour will make judicious decisions about where to distribute the reductions. Just read up on Labours plans for the economy before you post.

  6. AlanGiles

    If I post “pure nonesense” at least I don’t use the spineless expedient of posting under “guest”.

    The sober truth is that Balls fully accepts the gravamen of Tory spending cuts and any adjustments will not be “judicious” but merely fiddling with minor detail.

    Perhaps Labour lickspittles genuinely do believe Balls and Miliband will be “fairer” (their favourite word) but the great majority of the people will see no appreciable difference between the real Tories and Balls and the ToryLite

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