Austerity is supposed to be over - but election manifestos need a closer look
Experts warn cuts 'baked in' to Conservative spending plans
AUSTERITY is meant to be over, according to UK government ministers and many commentators.
The run-up to the election saw all the main parties signalling that after years of cuts and belt-tightening, the spending taps were about to be turned on.
The era of George Osborne insisting national debt must be paid down at almost any cost would be consigned firmly to history and money could flow more easily again.
Pundits described Labour and the Conservatives as both having “lavish” spending plans and wondered where the cash was going to come from.
But now the manifestos have been published, the picture needs to be reassessed.
Labour has indeed set out ambitious plans, including a huge increase in NHS funding, scrapping tuition fees, expansion of free childcare and plans to nationalise rail, energy, water and broadband.
But even if Labour were to implement its proposals in full, it would still leave Britain with a level of public spending well below many other European countries.
The Lib Dems propose increased spending too, most notably on universal free childcare.
The Tories’ spending plans were always going to be more modest, but were still billed as billions more for public services.
However, following publication of their manifesto on Sunday, the sums show Boris Johnson is proposing just £2.9bn more a year against the £83bn outlined by Jeremy Corbyn. For every pound the Conservatives have pledged to spend by the end of the next parliament, Labour has promised £28.
And despite all the hype beforehand, the verdict from the Institute of Fiscal Studies was clear - austerity has been “baked in” to the Tory plans.
IFS director Paul Johnson says: “If the Labour and Liberal Democrat manifestos were notable for the scale of their ambitions, the Conservative one is not. If a single budget had contained all these tax and spending proposals we would have been calling it modest. As a blueprint for five years in government the lack of significant policy action is remarkable.
“Health and school spending will continue to rise. Give or take pennies, other public services, and working age benefits, will see the cuts to their day-to-day budgets of the last decade baked in.”
And former Prime Minister Gordon Brown made a similar point. Speaking at the weekend, he said: “People talk of the Government spending more but austerity has not ended for millions of families with children and millions of low-paid workers.
“Austerity for them will continue throughout the next Parliament if Boris Johnson’s policies are implemented.”
When it comes to paying for all the promises, Labour has made clear it will put up taxes on the highest paid and corporations to fund its plans. At the same time, the party has pledged 95 per cent of the population will not pay any more in tax.
Boris Johnson, perhaps seeking to avoid being portrayed as the friend of the billionaires, has dropped plans to cut corporation tax even further and made no mention in the manifesto of his pledge during the Tory leadership race to give higher earners a tax cut by increasing the threshold for the 40p rate from £50,000 to £80,000.
Even in what is supposedly the “Brexit election” the economy is likely to be a big factor in helping people decide how to vote.
The idea austerity was over will have cheered many - but perhaps they need to take a closer look.