Saturday, May 27, 2017
More questions about the Tory and Labour manifestos
I have already commented on the failure of both Labour and the Tories to even pretend to make the sums in their manifestos add up, but the last word as ever must go to the independent Institute for Fiscal Studies.
As the Evening Standard points out, the respected Institute for Fiscal Studies hsve said that the Labour leader should abandon the “pretence” that only the rich would be hit when it came to fund his plans for more public spending:
In a damning report, it said there were “factual mistakes” in shadow chancellor John McDonnell’s budget plans and a reliance on tax revenues that were simply too optimistic, leaving a £9 billion shortfall even if a Labour government stuck to its budget.
The IFS also found problems in Theresa May's plans, saying her flagship promise to slash immigration would “cause considerable economic damage” and cost the Government £6 billion a year in lost revenues.
Benefits cuts for working people in the coming five years would be tougher than the cuts by the post-2010 Coalition, while austerity threatened “unacknowledged risks” to the quality of public services, it claimed.
In a searing conclusion, IFS deputy director Carl Emmerson said: “The shame of the two big parties’ manifestos is that neither sets out an honest set of choices. Neither addresses the long-term challenges we face.
“For Labour we can have pretty much everything — free [higher education], free childcare, more spending on pay, health, infrastructure. And the pretence is that can all be funded by faceless corporations and ‘the rich’.”
He went on: “The Conservatives simply offer the cuts already promised... with that offer come unacknowledged risks to the quality of public services, and tough choices over spending.”
Mr Corbyn and Mr McDonnell faced the most uncomfortable questions following the IFS study because it claimed to have found blunders in their sums.
It said tax measures that Mr McDonnell insists would hit only the “rich” earning £80,000 or more
would fail to raise the £49 billion promised for spending. The measures would instead raise only £40 billion in the short run — and less as time went by and companies invested elsewhere to avoid higher corporation tax, the IFS said.
“Their proposed plan for paying for this expansion in state activity would not work,” it said. “They would not raise as much money as they claim even in the short run, let alone the long run. And there is no way that tens of billions of pounds of tax rises would affect only a small group at the very top as their rhetoric suggests.
"The reality of Labour’s sums, said the IFS, would be “higher taxation affecting broad segments of the population”.
He continues: Tory tax plans would make 24 million basic rate payers some £33 better off a year but also see four million higher rate taxpayers gain £208 a head. But Conservative cuts to working age benefits would grab £11 billion from families and be harsher than cuts under the Coalition. They would make the lowest paid workers “significantly” less well off.
In the longer term, Mr Corbyn’s promise to keep the retirement age at 66 despite longer lifespans would create a £50 billion black hole by 2050.
Mrs May’s abolition of the “triple lock” on pensioner incomes would save nothing in the next parliament. And Mr Emmerson dismissed her decision to means test winter fuel payments as making “a wholly trivial difference to spending”.
On immigration, the IFS said Mrs May’s plans would have harmful side-effects, while her target of cutting levels to the “tens of thousands” would “damage the economy and the tax base”. “Their continued focus on reducing immigration would, if effective, cause considerable economic damage as well as creating an additional problem for the public finances,” said Mr Emmerson.
Some £6 billion of revenues would be lost, while choking the supply of keen young overseas workers would hamper efforts to tackle the national crisis in care provision for the elderly. “Denying entry to young, working immigrants would make that challenge all the harder to meet,” said Mr Emerson.
It seems that whoever wins on 8th June, the country is well and truly screwed.
As the Evening Standard points out, the respected Institute for Fiscal Studies hsve said that the Labour leader should abandon the “pretence” that only the rich would be hit when it came to fund his plans for more public spending:
In a damning report, it said there were “factual mistakes” in shadow chancellor John McDonnell’s budget plans and a reliance on tax revenues that were simply too optimistic, leaving a £9 billion shortfall even if a Labour government stuck to its budget.
The IFS also found problems in Theresa May's plans, saying her flagship promise to slash immigration would “cause considerable economic damage” and cost the Government £6 billion a year in lost revenues.
Benefits cuts for working people in the coming five years would be tougher than the cuts by the post-2010 Coalition, while austerity threatened “unacknowledged risks” to the quality of public services, it claimed.
In a searing conclusion, IFS deputy director Carl Emmerson said: “The shame of the two big parties’ manifestos is that neither sets out an honest set of choices. Neither addresses the long-term challenges we face.
“For Labour we can have pretty much everything — free [higher education], free childcare, more spending on pay, health, infrastructure. And the pretence is that can all be funded by faceless corporations and ‘the rich’.”
He went on: “The Conservatives simply offer the cuts already promised... with that offer come unacknowledged risks to the quality of public services, and tough choices over spending.”
Mr Corbyn and Mr McDonnell faced the most uncomfortable questions following the IFS study because it claimed to have found blunders in their sums.
It said tax measures that Mr McDonnell insists would hit only the “rich” earning £80,000 or more
would fail to raise the £49 billion promised for spending. The measures would instead raise only £40 billion in the short run — and less as time went by and companies invested elsewhere to avoid higher corporation tax, the IFS said.
“Their proposed plan for paying for this expansion in state activity would not work,” it said. “They would not raise as much money as they claim even in the short run, let alone the long run. And there is no way that tens of billions of pounds of tax rises would affect only a small group at the very top as their rhetoric suggests.
"The reality of Labour’s sums, said the IFS, would be “higher taxation affecting broad segments of the population”.
He continues: Tory tax plans would make 24 million basic rate payers some £33 better off a year but also see four million higher rate taxpayers gain £208 a head. But Conservative cuts to working age benefits would grab £11 billion from families and be harsher than cuts under the Coalition. They would make the lowest paid workers “significantly” less well off.
In the longer term, Mr Corbyn’s promise to keep the retirement age at 66 despite longer lifespans would create a £50 billion black hole by 2050.
Mrs May’s abolition of the “triple lock” on pensioner incomes would save nothing in the next parliament. And Mr Emmerson dismissed her decision to means test winter fuel payments as making “a wholly trivial difference to spending”.
On immigration, the IFS said Mrs May’s plans would have harmful side-effects, while her target of cutting levels to the “tens of thousands” would “damage the economy and the tax base”. “Their continued focus on reducing immigration would, if effective, cause considerable economic damage as well as creating an additional problem for the public finances,” said Mr Emmerson.
Some £6 billion of revenues would be lost, while choking the supply of keen young overseas workers would hamper efforts to tackle the national crisis in care provision for the elderly. “Denying entry to young, working immigrants would make that challenge all the harder to meet,” said Mr Emerson.
It seems that whoever wins on 8th June, the country is well and truly screwed.
