Newspaper Articles

Despite manifesto promises parties often dance to a different tune

Date: 01 May 2017
Authors:
Publisher: The Times
Published in: Times

I enjoyed my summer holiday in 2015 reading Nick Robinson’s brilliant Election Notebook, covering the campaign that year. I especially liked his entry for Thursday, April 23. That was the day in 2015 when we at the Institute for Fiscal Studies launched our analysis of the main parties’ manifestos. As Nick puts it, we “patiently explain the facts and highlight the details we’re not being told by those pesky politicians”.

I liked that bit, and the bit where he’s nice about me, but then he goes on to burst the bubble. The choice is simple, he says. The Conservatives will spend and borrow less, Labour will do more of each. “You don’t need an institute to tell you the answer,” he writes. “Or a number cruncher. Or a statistic. You have to make a judgment based on whose values you share and who you trust.”

In other words, what’s the point of a close analysis and a costing of the manifestos? It’s pretty obvious in broad terms where the differences between the parties are and, in any case, nobody really expects them to keep to the precise details of manifesto promises.

That’s pretty starkly illustrated by what has happened to the public finances since 2015. We pored over the details of the plans and the promises in the manifestos. We reckoned the Conservatives were aiming at a deficit of about 0.5 per cent of national income, a bit less than £10 billion, this year, while Labour were aiming to borrow about 2 per cent of national income, nearly four times as much.

In fact, we are now heading for borrowing somewhat more than Labour was promising. Present borrowing plans look much more like those laid out in the 2015 Labour manifesto than they do those set out by the Conservatives. Of course, that comparison is a little unfair because borrowing depends not just on tax and spending decisions but on the performance of the economy, and the economy has again underperformed.

Yet actually the government has not been anywhere near as tough on public spending as the manifesto promised. Perhaps that’s not so surprising. The Conservatives did not set out at the time how they were going to cut £10 billion from social security spending within two years, nor how they were going to carve £30 billion from departmental spending. They haven’t delivered. But I hear few voices complaining that they have been too soft on spending.

Nick was right. This was all about signalling, messages, trust and very broad brush choices. So is there any point in taking notice of anything beyond the obvious big picture differences? Will my colleagues and I be wasting our time over the next month and a bit as we subject claims and counterclaims, promises and policies, to forensic examination? It’s a question worth taking seriously, however uncomfortable us nerds and wonks might find it.

Here’s why I do think it matters. First, specific promises made in manifestos really do matter. We saw that in the swift demise of this year’s budget as the chancellor’s desire to raise national insurance for the self-employed bumped up against the manifesto pledge not to raise national insurance rates. And while cuts to social security benefits are not planned to come in anywhere near as fast as promised in the 2015 manifesto, they are still going to happen. If parties are going to make these sorts of pledges, the electorate needs to understand what they mean.

They mean a lot. The tax lock is hugely constraining, the benefit cuts genuinely painful. It’s terribly easy to say that you won’t raise taxes, that you will take an axe to welfare. Someone needs to spell out what it will mean.

Second, it is also rather too easy to pretend that hard choices don’t really exist. Last time around the parties were all trying to outbid one another with pledges to raise billions from unspecified crackdowns on tax avoidance. This time we are already hearing that “the rich” and “corporations” will be the ones paying for all sorts of extra spending.

Previously claims have been made about reducing “waste”. Of course there is some space for all that, but no party should be allowed to get away with pretending that there are untold billions lying around waiting to be picked up painlessly. There aren’t. The other promise oft-repeated at election time is that more spending will be paid for from the proceeds of greater economic growth. No politician can guarantee a big and sustainable increase in growth in the short term. It is the unglamorous job of us wonks to point out where reasonable aspirations end and wishful thinking begins.

Third, there are the trade-offs and politicians are generally very bad at spelling them out. Economists are often mocked for being two-handed — on the one hand this, on the other hand that. We need more two-handed politicians, because politics is about weighing up choices and trading one thing off against another. There is no right answer to the question how much should we tax or borrow or spend. There are costs to high borrowing, but there are benefits, too. We can have more spending on health and social care, but it would mean fewer resources being devoted somewhere else. We can have lower taxes, but only with higher borrowing or lower spending on things we care about.

Voters will choose on the basis of values and trust and broad direction — a party that doesn’t win on those is likely to lose any election — but a light needs to be shone on the details, too. If the hard questions are avoided, if inconsistencies and undeliverable promises go unchallenged, then we will all be losers.

This article was first published by The Times and is reproduced here in full with permission. Paul Johnson is director of the Institute for Fiscal Studies. Follow him on @PJTheEconomist