Labour, Tories – mixed messages on money

by | Mar 12, 2010


[youtube]http://www.youtube.com/watch?v=CP9_kkzfN-w[/youtube]

It’s no wonder the markets are raising questions about UK public finances – neither of the main parties has anything approaching a clear message on fiscal tightening.

From Labour, you get blithe assurances on taxes. Liam Byrne didn’t quite ask us to read his lips yesterday when promising no new tax increases, but he might as well have done. Carl Emmerson from the Institute for Fiscal Studies was unimpressed:

I cannot see how the Government can promise to not affect front line services when you look at the scale of the cuts they have got to plan for.

Liam Byrne is talking just about the first four years and after that there will undoubtedly have to be more pain and that is likely to be tax rises or even greater public sector cuts.

But the Tories are not in the clear either. I was baffled by William Hague’s recent speech at the Conservative Party Spring Forum. Half way through his speech, he lays out the Tory pitch to the undecided voter:

And to those who say they do not know what the Conservatives will do, let us tell them. We will cut the spending that cannot go on and the borrowing that leads to ruin.

So what follows? Here are all the commitments Hague makes that will cost money:

(i) Cutting taxes on business to give the UK the ‘most competitive’ tax environment in the G20

(ii) reversal of Labour’s planned national insurance increase

(iii) abolition or reduction of inheritance tax

(iv) two year freeze on Council tax (despite promises of the ‘biggest ever’ transfer of power to Councils)

(v) stamp duty abolished for first time buyers (despite unsustainable prices in the housing market)

(vi) more university places and apprenticeships

(vii) nursing care in their homes for the elderly.

And here are all the commitments is the only commitment that will clearly save money (though not much):

(i) Scrap ‘a large slice’ of expensive quangos.

And voters are supposed to be convinced this adds up to “vision of a Britain restored.”

Both parties need to convince the electorate they can get Britain back on its feet (the slogan I’d advise either to run their campaign under). But as Martin Wolf argues in today’s FT, at the moment it’s shaping up to be an election that both sides deserve to lose.

Author

  • David Steven is a senior fellow at New York University, where he founded the Global Partnership to End Violence against Children and the Pathfinders for Peaceful, Just and Inclusive Societies, a multi-stakeholder partnership to deliver the SDG targets for preventing all forms of violence, strengthening governance, and promoting justice and inclusion. He was lead author for the ministerial Task Force on Justice for All and senior external adviser for the UN-World Bank flagship study on prevention, Pathways for Peace. He is a former senior fellow at the Brookings Institution and co-author of The Risk Pivot: Great Powers, International Security, and the Energy Revolution (Brookings Institution Press, 2014). In 2001, he helped develop and launch the UK’s network of climate diplomats. David lives in and works from Pisa, Italy.


More from Global Dashboard

A Blueprint for Black Lives Matter in the Development Sector

A Blueprint for Black Lives Matter in the Development Sector

Over the past few weeks – in the wake of COVID-19 and the killing of George Floyd – we have seen development, aid, and humanitarian institutions try to respond more effectively to racism. Racism is rooted in a combination of prejudice and power, and action to combat...