Tory and Labour economic plans 'not credible', claims leading think tank

Posted On: 
28th November 2019

Neither the Conservatives or Labour have set out "properly credible" plans for the economy in their general election manifestos, according to the Institute for Fiscal Studies.

Either John McDonnell or Sajid Javid will have to implement their parties' economic plans after the election.
Credit: 
PA Images

The leading economic think tank said it was unlikely that either party would be able to keep the pledges they have made to voters.

Jeremy Corbyn’s policies would see tax and spending rise to the highest level since after the Second World War, the IFS said, but would still "not be able to deliver investment spending increases on the scale they promise".

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IFS director Paul Johnson was equally scathing about the Conservatives' vow not to put up income tax, VAT or National Insurance.

He said: "The chances of holding spending down as they propose over a five-year Parliament look remote.

"Why have they been so immensely modest in their proposals? Because to do otherwise would either mean resiling from their pledge to balance the current budget or would mean being up front about the need for tax rises to avoid breaking that pledge.”

Mr Johnson added: "The risk for the Conservatives is that their ‘die in a ditch’ style promise to exit the Brexit transition period by the end of 2020 could mean something rather like a ‘no deal’ outcome.

"That would harm the economy and of course increase the debt and deficit."

He said that Labour's claim that they could increase public spending by £135bn while only increasing taxes on companies and the top 5% of earners was "clearly not true", while the party's promise to abolish in-work poverty within five years "is not achievable".

Mr Johnson said: “It is highly likely that Labour, at least over the longer-term, would need to implement other tax-raising measures in order to raise the £80 billion of tax revenue that they want and even just sticking to those proposals, they would clearly increase taxes for many millions outside the top 5%.

“In reality, a change in the scale and scope of the state that they propose would require more broad-based tax increases at some point.

“Much of Labour’s manifesto should presumably be seen as a long-term prospectus for change rather than a realistic deliverable plan for a five-year Parliament.”

'CORBYN DOESN'T HAVE ANY CREDIBILITY LEFT'

In response Labour’s shadow Chancellor John McDonnell said his party “accept with pride” the IFS assessment “that we are too ambitious”.

He said: “We are ambitious for our country and will be investing on the scale needed to end austerity, tackle climate change and build our country’s future.”

Mr McDonnell added: "What is also clear from the IFS is that under the Conservatives there will be no change and austerity will continue to undermine our public services."

But the Chancellor Sajid Javid said: “Independent experts have confirmed today that Jeremy Corbyn’s plans would mean millions people more paying higher taxes – leaving his manifesto promises lying in tatters. 

“With no position on Brexit and no plan to how to pay for his £1.2 trillion spending spree Corbyn simply doesn’t have any credibility left. 

He added: “Corbyn can’t pretend that it’s only the rich or businesses that will pay the price for his plans.

“It is the many, not just the few who will be hit with higher taxes – as he was forced to admit.”

And the Lib Dem deputy leader Ed Davey said: "This damning assessment shows that neither the Tories or Labour have a credible plan for the economy.

“Both are failing to come clean with the electorate and ignoring the Brexit black hole their plans would leave in the public finances.

“Everyone knows you can't have something for nothing, but both the Tories and Labour are pretending you can.”