There are big differences between Labour and Conservative spending plans. The IFS just proved it

Don't let it be lazily said that Labour and the Conservatives are 'the same'


The next time someone (particularly someone on the left) tells you that Labour and the Conservatives are the same, point them to today’s Institute of Fiscal Studies (IFS) assessment of the parties’ spending plans for the next parliament.

We’ll start with the Conservatives.

Conservative plans for a reduction in borrowing in the next parliament require ‘some large spending cuts or tax increases’, as the IFS puts it. It adds:

Departments outside the NHS, education and aid look to be facing cuts of 17.9 per cent between 2014–15 and 2018–19. This would imply average cuts to these spending areas of one third in real terms from the start of austerity (in 2010-11) up to 2018-19. These ‘unprotected’ areas include defence, transport, law and order and social care.

As for Labour, according to the IFS:

[Labour] have pledged to ‘get a surplus on the current budget’ without specifying either exactly when or how much of a surplus. This pledge could be consistent with any reduction in borrowing totalling 3.6 per cent of national income or more (given the coalition government’s investment plans). A reduction in borrowing of 3.6 per cent of national income would require little in the way of spending cuts or tax increases after this year.

In terms of the measures required by Labour to bring about their plans, the IFS says that:

If [Labour] can find £7.5 billion of revenues from anti-avoidance measures, as they say they can, then they might need to find a mere £1 billion from further real cuts to unprotected departmental spending.

So there is a choice and it is between ‘cuts of 17.9 per cent between 2014–15 and 2018–19‘ and ‘little in the way of spending cuts or tax increases after this year“.

Don’t let it be lazily said that Labour and the Conservatives are ‘the same’.

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

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35 Responses to “There are big differences between Labour and Conservative spending plans. The IFS just proved it”

  1. Robert Gruder

    I trust in believing what a party can achieve by their record… not their promises. The last three Labour governments left the economy in dire straits – the worst being that triggered specifically by Miliband and Ball’s own policies. The Tory’s end this parliament with record employment, minimum inflation, highest economic growth for any major economy, higher real incomes (and growing) and major growth for Britain as a manufacturing nation. I’m no supporter of Tory social philosophy, but I can recognise competence when I see it.

  2. littleoddsandpieces

    Public spending does not cause a recession.

    Politicians do not rule the economy. Capitalist high finance does that.

    Austerity was done in the 1920s, caused a boom to fall flat and did nothing to stop the 1929 Depression’s banking crash.

    The Lehman Bros crashed in 2008 and nearly took the world’s banking system with it.

    Labour had absolutely nothing to do with anything.




    Socialist GB,


    Class War,


    The Left Unity Party

    MP or council councillor candidate running.

    Vote SNP in Scotland in LABOUR, TORY AND LIB DEM VOTING areas.

    Vote Plaid Cymru in Wales even in Labour areas, save where there are a few TUSC in South Wales.

    Labour did not win even more than the Tories in 2010.

    More people did not vote than voted, so no so-called big party won.

    The biggest margins are in Labour voting areas, where such voting as Labour win with around 10,000 votes, agaisnt 50,000 not voting.



    326 MP minimum threshold to rule UK parliament.

    Labour only had around 250 MPs from 2010, so cannot possibly make up the difference.

    Even if Labour got more MPs than Tories, neither of them will reach that minimum threshold.


    The Tories have to remain in power in a severe hung parliament, in a caretaker government, by the rules of UK parliament.



    Bring in around 250 new, guaranteed anti austerity parties as MP into UK government.

    Equal to number of Tory or Labour MPs.





    Labour will have to utterly change to an anti austerity party, instead of saying they will not reverse the Tory cuts nor change anything in the last Tory budget.

    Neither will Labour revoke the Coalition’s Pension Bills 2010-2014 (flat rate state pension) that will see the descendants who fought to bring about the Labour with NIL STATE PENSION FOR LIFE.

    The poorest workers long ago were dumped out of the welfare state and state pension by the LOWER EARNINGS LEVEL denying them any automatic National Insurance credits.

    The flat rate state pension leaves them and many other people, but especially women, with NIL STATE PENSION FOR LIFE.

    See why, at end of my petition, in my WHY IS THIS IMPORTANT section:

  3. Cole

    Rubbish. There was a worldwide recession at the end of the last Labour government. Gordon Brown didn’t cause this, and Labour’s spending levels were backed by Osborne. By 2010 the economy was beginning to grow before Osborne screwed it up.

    As for previous Labour governments, yes, there was a mess in 1979, caused largely by irresponsible wildcat strikes; in 1970, the economy was in pretty good shape.

    What about the Tory governments? Not great in 1964, a total meltdown in 1974, and such an unpopular government in 1997 that Blair got a record majority (and was re-elected twice).

  4. Guest

    Ah yes, a recovery, “dire straits”. You of course prefer lower wages and a bubble in the city.

    You praise, specifically;

    Record LOW hours worked per worker
    LOW real incomes, and with very low rates of increase
    Deflation, which is highly damaging
    The economy shrinks, outside the city
    Manufacturing in dire straits

    You evidently don’t support the Tories, but rather campaign for them and their goals, as you recognise they’re incompetent and thus promote them.

  5. Leon Wolfeson

    The thing is, Labour’s promise is wooly and completely undermined by other policies of theirs which shadow those of the Tories, such as their promise to massively slash benefits with the overall benefit cap, which will further slash revenue and could indeed make the Tories target look optimistic.

    In fact, Labour seem to be where the Tories were in the last election, promising something which looks better without properly specifying how to do it, and likely to screw it up. Sadly.

  6. Gareth Hunt

    Labour though is being “considerably more vague”, according to the IFS. It’s called playing fast and loose with the truth. Tories have said x amount much like the Lib Dems but Labour – apart from tax evasion and mansion taxes – haven’t given us any details in their manifesto.

  7. Disgusted of Totter's Lane

    When the Tories talk about an overall welfare cap, I can see how that might involve ‘massively slashing benefits’ – because at the end of the day, whatever they might say about tackling the root causes of high welfare spending, they want to keep wages low, rents high, the labour market maximally flexible, and spending that might help create jobs on a tight rein. But that whole picture changes under a government that genuinely intends to tackle low pay, high housing costs, job insecurity etc.; rather than providing them with a ‘fiscal prudence’ justification for slashing benefits, it would provide them with a ‘fiscal prudence’ justification for raising the minimum wage, building affordable homes, capping private-sector rents, etc. Miliband has been pretty consistent in arguing for just this sort of approach (as opposed to New Labour-style tolerance of low pay, high rents etc. but with the effects mitigated by higher spending on things like tax credits and housing benefit) – I think Labour should be given the benefit of the doubt here.

  8. Norfolk29

    You certainly do not recognise false statistics when you see them. Higher real incomes for about 10% of the working population. Answer Paxmans question “could you live on a zero hours contract”. I couldn’t.


    The seventies recession was due to massive oil prices it would have happened Labour or Tory. The fact is is that the bankers and money lenders run the world. Governments some elected some not just manage the budget mainly for their friends if Tory and for a few more if Labour. So if you are the few more then vote Labour or start thinking about overthrowing the the system when you sober up.

  10. Leon Wolfeson

    Tories? Labour have signed onto implimenting it. And it means massively slashing benefits, because they’d breach that cap due to their action as stabilisers in the economy otherwise.

    And sure, but Labour are not that party.

    They have committed to a very low cap on the minimum wage’s rise. They have refused to allow councils to borrow, do not propose rent caps (rather, limiting increases, with the assumption that rents SHOULD always increase).

    You are arguing that I should ascribe to a austerity-loving right winger qualities which I’d have to look as far left as,,,hmm…the SSP or PC for.

    Tax Credits and Housing Benefit, for your information, are included in the benefit cap and you can expect them to eb slashed sharply as well.

  11. Luke Styles

    Lol Gareth. All Tory spending plans are uncosted. All they can say is “look at our record” that just doesn’t cut it. There is nothing more vague than that. Where is the extra money for the NHS coming from? As the Daily Politics said a money tree?

  12. Disgusted of Totter's Lane

    But surely the cap would only be breached due to ‘stabiliser’ benefits kicking in if the economy went into recession? In which case, the Government of the day would have to decide whether to massively slash benefits at that time, or to breach its cap in view of the economic circumstances. The Tories might do the former; Labour I’d expect to do the latter. In any case, the main stabiliser benefits (JSA and associated HB) have been excluded from the cap by design.

    I remain hopeful that Labour *are* that party.

    They haven’t said anything about capping the MW; they’ve merely set what they consider to be an achievable target.

    I think Miliband is being cleverer and more ambitious than you’re giving him credit for. Rather than treating the welfare cap as something that means he’s ‘forced’ to cut benefits, I expect him to treat it as something that ‘forces’ him, for Tory-endorsed reasons of fiscal rectitude, to take action to drive up wages, make housing more affordable, get young people trained up, etc. It will mean calculations like “spend more on house building today, spend less on housing benefit tomorrow” can be brought out into the open.

  13. Leon Wolfeson

    Those benefits have been going up, sharply. Most of the economy is still acting as if there is a recession – if the overall welfare cap had already been in place as a hard limit (as it will from this fiscal year), it would have been breached!

    It’s completely untrue that HB is are outside the overall cap, of course. In fact, all disabled, carer’s benefits, HB, work credits, child credit, maternity and paternity care are included.

    (JSA is outside it, but JSA is under 3% of welfare spending, and likely to be cut sharply under both parties plans anyway. And of course pensions are not included.)

    Labour have committed to the hard cap and as you hence admit slashing benefits, and you’re making excuses for right-wing neoliberal austerity pushers.

    Every penny not spent, at this time of deflation, is going to have a serious knock-on effect. i.e. your “fiscal rectitude” is Punishment for the poor, disabled and families with kids etc. which will make the economy worse. Cannibalising future markets for this quarter’s profits.
    Tory AND Labour policy.

    Let’s not even mention the fact that the increases in the cap are very low – 2.1% in the first year, 2% in the second year, 1.7% in the third year etc., when demand is likely to rise sharply.

    And of course the idea is that it encourages governments to proactively cut benefits so as to not have to answer questions in parliament on the issue.

    He’s also refused to allow borrowing from councils to build houses, so don’t even try that propaganda!

  14. Guest

    LU…LU…oh right, the people who think equating all Zionists to Naftali Bennett is a good thing.
    Worse than even Respect.

  15. Guest

    You want to run the world. Right.

  16. Gareth Hunt

    Look at our record? I’m talking about the IFS? This is not party politics but a chance to engage with the voters with fact.

  17. Robert Gruder

    Well, you can try to deny the reality of the improved economic conditions all you want but the numbers don’t lie – so you’re just being dogmatic. And yes, the recession was world wide but Britain made the best and earliest recovery under the Tories. The lack of regulation of banking in the UK was directly the policy of Balls and Brown. The lack of financial reserves was due to flagrant overspending by Brown – he got us into the terrible deficit. The only left of centre party with financial credibility is the Liberal Party. Labour is a joke, and isn’t to be believed!

  18. Disgusted of Totter's Lane

    Not all HB is excluded from the cap, but HB associated with JSA claims is.

    I’m not setting out to make excuses for right-wing neoliberal austerity pushers any more than you’re setting out to defend a New Labour sticking-plaster approach to structural problems of low pay, high rents etc. It all depends how cynical you want to be. *Maybe* Labour’s support for an overall welfare cap, on the basis that we should be tackling the structural problems behind rising welfare spending, is a smokescreen for a commitment to slashing benefits. *Maybe* your opposition to an overall welfare cap, on the basis that it will harm the poor, is a smokescreen for a Blairite reluctance to tackle structural problems in a way that goes against the interests of exploitative employers, landlords etc. Or just maybe you’re actually on the same side here, trying to strike a balance between helping the poor through adequate welfare spending and helping them by addressing the problems driving that spending, and happen to disagree on the best way to do it in the political and economic context we find ourselves in.

    Based on everything I read about Miliband’s political philosophy, I see no reason to be cynical about his pushing a ‘predistribution’ approach to tackling problems of poverty and inequality – i.e. pursue higher wages rather than more tax credits, lower rents rather than more Housing Benefit, etc. He might be wrong about what’s possible, he might be underestimating what’s necessary, but if the whole thing’s a front and he’s actually just a “right-wing neoliberal austerity pusher”, he’s been doing a good job of maintaining that front in public and in private over many years. (If anything, the IFS analysis suggests it’s Labour’s avowed commitment to more cuts after 2016 that’s just a front!)

  19. Nick Smegg

    There is a money tree. Instead of borrowing from the bond markets, the next government could finance a proportion of public expenditure by using the inherent credit creation power of the Bank of England.

    This has been sued since 2009 to give money to the commercial banks, supposedly to repair their balance sheets and pass on to the wider economy, but in fact used for speculation. Ever wondered why the stock market keep going up? It’s nothing to do with economic fundamentals of the economy.

    Quantitative Easing for jobs!

  20. Leon Wolfeson

    And that’s a small fraction of HB.

    There’s no “maybe”. It IS designed, 100%, to slash benefits when they’re most needed.

    I’ve – in fact – repeatedly called for a basic income. I completely oppose your “balanced” call which is based of thinking of the poor as being the people in the first place”

    Miliband is *just* a standard neoliberal austerity-pusher. He’s routinely signing onto more punishments for the poor – there’s no “front” at all.

  21. Disgusted of Totter's Lane

    Oh, OK, I see how this works now. Cool! So, you’re *just* a rabid Blairite whose opposition to the welfare cap IS designed, 100%, to avoid having to take any real action to address low pay and high housing costs, in case it upsets your capitalist chums. I completely oppose your “unbalanced” call to make the poor ever more reliant on crumbs from the table so that employers and landlords can get rich. There’s no “maybe” about your despicable intentions, no “front” at all.

    I mean, OK, that’s a grossly unfair misreading of your stated position, but at least it means I get to righteously oppose a straightforward (albeit imaginary) Bad Guy rather than dealing with awkward things like differences between myself and other progressives.

  22. nodbod

    The national debt is currently 1.3 to 1,4 trillion pounds. I do not recall it being that high even when Labour left government. Gidiot Osborne has borrowed more in five years than all the labour governments ever. He is still borrowing more than budgetted for but that doesn’t make for good headlines. Gidiot also complained that the rules for banking/bankers were still too restrictive under Labour but Labour was the party in power.

    Where ever this idea came from that the Tories are financially competent just leaves me bewildered (but then I am not the sharpest tool in the box). I also recall that a numberof major nations suffered financial crises around 2008, including USA, Japan, Germany, France, Greece, Italy, Spain, Ireland. Did Gordon Brown cause their problems as well? I remember that Brown was hailed as a genius (for a short time) for stopping the banks going bust. I just wonder what would have happened if he had not borrowed to bail out the banks.

    One last thing, what happened to the £385 billion that Gidiot and the Bankof England invented (Quantative Easing), the equivalent to giving each and every person in the country £5000? It was supposed to have been loaned out to small businesses to kick start the recovery. We have only just started growing again and they did it some years ago.

  23. Leon Wolfeson

    Works? I’m talking about Labour, not your fantasy image of them. Your position there is a fair reading of your position of course, as I note the Coalition’s position, very strongly staked, as “progressive”.

    For myself and my actual views, I’m not “progressive”, I’m a Mutualist.

    Very, very few of the leftists – from various parts of the spectrum – I discuss things with these days will have anything to do with the “progressive” tag either, it’s a poison pill these days.

    I’ll keep fighting for voting reform, you keep fighting for the welfare cap.

  24. Leon Wolfeson

    Do remember that national debt as a figure is essentially irrelevant. What’s relevant is %GDP.

    Also, no, QE is in no way equivalent to giving people the cash. In fact, several oil-rich counties DID give every citizen a chunk of cash. QE is quite different, and mostly went to Bank’s reserves under the new rules on holding those – rather than being spent.

    Also, please don’t fall for the headlines on growth, we have a bubble in the city, the rest of the economy is going sideways at best.

  25. Leon Wolfeson

    Improved? Oh yes, the City’s doing fine, the rich are richer, wages are down in real terms.

    We *were* recovering under Brown, the Coalition instead stopped that on an emergency basis and we had a depression while other countries recovered, as you whine about a 0.6% average deficit (not ideal, but hardly disastrous).

    You manage to make Labour look honest. Well done.

  26. nodbod

    Leon, just did not want to be too pointed. The growth is a sham, concentrated in the south and London (though I live in the south and do not see too much evidence personally).

  27. Disgusted of Totter's Lane

    “I’m talking about Labour, not your fantasy image of them.”

    *Ironymeter explodes*

    “Your position there is a fair reading of your position of course”

    I know you are, ‘cos you said you are, but what am I?

    “For myself and my actual views…”

    What, 100% rabid Blairism with no “maybe” about it?

    “the leftists – from various parts of the spectrum – I discuss things with”

    These nuanced and mutually enlightening “discussions” of which you speak: do they by any chance consist mainly of you assuming the worst of everyone you disagree with on some specific policy point, then insisting in the face of anything they say to the contrary that they are in fact just Tory stooges?

    “I’m a Mutualist… I’ll keep fighting for voting reform”

    An anarchist who believes in “reforming” the institutions of the state? Erm… OK…

    Anyway, I should know by now not to get into these “discussions” on the internet, so I’ll leave it there I think.

  28. Robert

    Who’s facts is the question, they seem to be rather thin on the ground those facts.

  29. Guest

    Stop shooting other people’s ironymeters, then, American.

    PS, do look up mutualism sometime. And not on Wikipedia.

  30. Leon Wolfeson

    As far as I can see form the figures it’s concentrated in the City. Very much so. Remember London also has some of the poorest areas of Britain.

  31. Leon Wolfeson

    Money tree? Oh, fiat currency.

    Whereas there is NOT a jobs tree.

  32. Arizona

    Quoting Labour spending plans in this article just won’t happen in reality. Everyone knows Labour can only get into Government with the support of the Scottish Nats, and they intend to tax every Englishman £180 billion to spend in Scotland as the price of their support to prop up Millibands Government. It means plans to build local schools and roads and hospitals in England will be cancelled and built in Scotland instead.

  33. Robert Gruder

    No… If you check the facts you will find the major recovery is in manufacturing, not the City. Retail is also strong along with technology companies. The Tories encouraged recovery by lowering corporate taxation. I know you hate capitalism but it’s kind of embarrassing to your credibility if you just produce blind lies..
    The truth-
    UK economy highest growth, highest employment, lowest inflation and best recovery of personal income iof all major Western economies

  34. Leon Wolfeson

    He’s not talking about Spain, but the UK. As you then talk about more cash being offshored from the UK, bleeding our economy – good old capitalism.

    The truth –

    * Bubble in the city and housing prices.

    * Hours worked flat

    * Deflation (TERRIBLE)
    * Incomes down hard for the 99%.

    Other western economies didn’t have our start of recovery and then a deliberate depression either. He’s not producing your blind lies, or running for political office.

    Keep supporting higher poverty.

  35. Taulant Lutfiu

    I think Putin would be a good idea to fix Great Britainn!!

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