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”
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?
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.
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!
Guest
LU…LU…oh right, the people who think equating all Zionists to Naftali Bennett is a good thing.
Worse than even Respect.
Guest
You want to run the world. Right.