Tuesday, March 30, 2010
A small matter of costing promises
Even amongst political parties there used to be an unwritten rule that if you are going to make promises at an election then you should at least make an effort to demonstrate how you are going to pay for them.
It is for this reason that the Tories are so wary about being too specific on what they will do if they ever reach government, that Tony Blair famously promised to match Tory spending plans for two years in 1997 and why the Liberal Democrats always seek to get their figures checked by the Institute of Fiscal Studies. It is not something that Plaid Cymru tend to do too rigorously but then they are not a serious party of government on the UK stage.
For some reason Labour appear to have abandoned this rule this time. Maybe they think that because they are in government they can get away with it, but surely people will be asking how they are going to fund the Trident programme, what money they will be using to pay for high speed rail links and the Severn Barrage and, as of today, how they are going to pay for their policy on social care.
Indeed that is precisely the question being asked by Age Concern. For them the issue is not so much Labour's alleged u-turn on a £20,000 "death tax" as the fact that over the next two to three years alone, with public spending cuts there could be a £2 billion hole opening up in the care budget.
Andrew Harrop, director of public policy at Age Concern, told the Today programme on Radio 4 on Tuesday: "The problem with these proposals is, is there enough money to pay for them?
"We really don't know whether these proposals will be funded adequately. Over the next two to three years alone with public spending cuts we could see a huge almost £2 billion hole open up in the care budget.
"So far we have only seen a few hundred million of new money promised. We need to have that hole closed over three years before we even look at the long term funding."
He added: "The politicians have to be frank about this. Over the next three years we think a hole of £1.75 billion is going to open up."
He is absolutely right. I do not think that any party has a satisfactory solution to this problem. Indeed it looks as if we are going to just mend and make-do for the most part. However, the recent trend of Labour Ministers making eye-catching policy proposals to tackle issues they have failed to face up to in the last 13 years in the run-up to the election does have a price tag.
It is possible that the reason that they did not do these things in any of their last three terms was because they could not be afforded. In which case the moral imperative to say how they will pay for them now is even greater.
As it is the Spitting Image sketch of a hungover Tory Cabinet waking up in Number 10 after the 1992 General Election after having trashed the place because they thought they might lose could apply to Labour several times over in a few months time.
These announcements have all the hallmarks of Cabinet Ministers determined to go out with a bang. If by some chance they do end up back in government for another five years they may well regret having spoken out. After all they will have to deliver enormously expensive promises in the context of having already maxed out the country's credit and needing to find a way of paying it back.
It is for this reason that the Tories are so wary about being too specific on what they will do if they ever reach government, that Tony Blair famously promised to match Tory spending plans for two years in 1997 and why the Liberal Democrats always seek to get their figures checked by the Institute of Fiscal Studies. It is not something that Plaid Cymru tend to do too rigorously but then they are not a serious party of government on the UK stage.
For some reason Labour appear to have abandoned this rule this time. Maybe they think that because they are in government they can get away with it, but surely people will be asking how they are going to fund the Trident programme, what money they will be using to pay for high speed rail links and the Severn Barrage and, as of today, how they are going to pay for their policy on social care.
Indeed that is precisely the question being asked by Age Concern. For them the issue is not so much Labour's alleged u-turn on a £20,000 "death tax" as the fact that over the next two to three years alone, with public spending cuts there could be a £2 billion hole opening up in the care budget.
Andrew Harrop, director of public policy at Age Concern, told the Today programme on Radio 4 on Tuesday: "The problem with these proposals is, is there enough money to pay for them?
"We really don't know whether these proposals will be funded adequately. Over the next two to three years alone with public spending cuts we could see a huge almost £2 billion hole open up in the care budget.
"So far we have only seen a few hundred million of new money promised. We need to have that hole closed over three years before we even look at the long term funding."
He added: "The politicians have to be frank about this. Over the next three years we think a hole of £1.75 billion is going to open up."
He is absolutely right. I do not think that any party has a satisfactory solution to this problem. Indeed it looks as if we are going to just mend and make-do for the most part. However, the recent trend of Labour Ministers making eye-catching policy proposals to tackle issues they have failed to face up to in the last 13 years in the run-up to the election does have a price tag.
It is possible that the reason that they did not do these things in any of their last three terms was because they could not be afforded. In which case the moral imperative to say how they will pay for them now is even greater.
As it is the Spitting Image sketch of a hungover Tory Cabinet waking up in Number 10 after the 1992 General Election after having trashed the place because they thought they might lose could apply to Labour several times over in a few months time.
These announcements have all the hallmarks of Cabinet Ministers determined to go out with a bang. If by some chance they do end up back in government for another five years they may well regret having spoken out. After all they will have to deliver enormously expensive promises in the context of having already maxed out the country's credit and needing to find a way of paying it back.
