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Fiscal Insight: GE2019 Manifesto Analysis

Our General Election 2019 Fiscal Insight analyses the manifesto proposals of the Conservatives, the Labour Party, the Liberal Democrats and the Green Party.

Overview

  • All the political parties are promising to increase taxes, public spending and investment
  • Conservatives are promising the least, but they have deferred significant decisions
  • Other parties propose spending a lot more, with Labour planning to nationalise utilities

Key points

  • Context: the public finances are on a financially unsustainable path
  • There are significant risks around the achievability of all the party manifesto plans
  • None of the parties set out a long-term fiscal strategy for the public finances

Analysis

  • The fiscal deficit has stopped falling and is rising with the ‘end of austerity’
  • Projected deficit in 2023–24 of £51bn to be £62bn (Conservatives), £118bn (Labour), £76bn (Liberal Democrats) or £133bn (Greens)
  • Public sector net debt at 31 March 2024 in the order of £1,880bn (Conservatives), £2,050bn+ (Labour), £1,940bn (Liberal Democrats) or £2,100bn (Greens)
  • No proposals for improving balance sheet management (assets £2.0tn, liabilities £4.6tn)
  • New fiscal rules, but questions about whether they would be adhered to

“All of the major political parties have set out plans to increase public spending and investment, despite a gloomy prognosis for the economy.

The Conservatives’ cautious set of proposals, arguably deferring big decisions with significant financial implications until after the election, contrast with the very radical proposals for restructuring the economy proposed by the Labour Party and the large spending and investment programmes proposed by Labour, the Liberal Democrats and the Green Party.

The parties propose short-term fiscal rules to guide their management of the public finances. The history of such rules is not encouraging, with most of the previous rules either breached or replaced, casting doubt on their credibility both in terms of assuring the public of fiscal responsibility and their usefulness in managing the public finances.

While there is increasing acceptance of the need for action on climate sustainability, there is little in the party manifestos on the potential of technological innovations to achieve a more productive economy. Importantly, none of the parties set out a long-term vision for the public finances, currently on an unsustainable path. Inaction now will only make things worse, increasing the financial burden that is passed onto future generations.”

Vernon Soare
Chief Operating Officer, ICAEW

You can be part of the conversation as part of our GE 2019: It’s More Than a Vote