April 15, 2015 by Paul Goldsmith
If you ever wanted to understand how close this election is, just think about this: The Conservative manifesto is all about jobs, and the Labour manifesto is all about fiscal responsibility. They have basically parked their tanks on each other’s lawns.
The key thing to understand about the Conservative manifesto is that the whole thing relies on trust. Whereas the Labour manifesto on Monday explained how they would pay for every single spending policy or tax cut they had, the Conservatives barely mention how they would pay for anything. Yes, there is mention of cutting the tax reliefs on pension contributions for those who earn more than £150,000 (which won’t work if they stop making pension contributions as the tax relief has been stopped!). This is used to explain how they will pay for an inheritance tax cut meaning homes of up to a million pounds can be passed on without inheritance tax. But really the Conservative manifesto is full of what they will do and very little about how they will fund it.
Say that to a Conservative politician though and they will argue that they say plenty of times how they will fund their tax and spending giveaways. It’s simple really. The ‘long-term economic plan’ will provide the funds for everything. That’s it. We can take everything on trust after that. Look, they say, we have take over after ‘Labour’s recession’, after which, in the words of Labour’s Treasury Secretary “There’s no money left”, and they have reduced the deficit by half as a share of national income, created 1000 jobs a day, and we have a macroeconomy with 3% growth, 0% inflation, and 5% unemployment. So yes, we should trust the Conservatives that they have what George Osborne calls a “balanced plan” to fund the tax cuts and spending pledges they have put in their manifesto.
To be able to cut inheritance tax, raise the personal income threshold so no-one on minimum wage pays it, raise the higher rate tax threshold, offer 30 hours a week (double) free childcare for 3 and 4 year olds, give the NHS an extra £8 billion a year, pay for all public sector workers to have 3 days off a year volunteering and not have to make massively swingeing cuts elsewhere or major tax rises too in order to clear the deficit and get us into surplus by 2019 is quite a feat. The Tories insist in the manifesto that their planned cuts are only the equivalent of saving £1 of every £100 the government spends. They argue there is no organisation that shouldn’t be able to do that. So, yes, we are really going to need to take a leap of faith with them.
Talking of leaps of faith, the main policy announced in the papers was the extension of the ‘Right-to-buy’ from council housing to the 1.4 million homes owned by Housing Associations. This will be funded by selling off large or empty council homes (for which we have a waiting list!) and building new smaller council homes apparently. Leaving aside the fact that the government doesn’t actually own Housing Association homes, so the legal problems involved could fell an Ox, it seems a odd idea that can only be about ideology. As this article from the New Statesman brilliantly explains, the Tories appear to be trying to create housing by selling of..um..housing. It is like saying that we are going to solve the problem of the under-equipment of our military by selling off their equipment. Yes, yes, I know, it’s all about building a property owning democracy and giving people a solid stake in society and all that. But it is also about building a property owning Conservative voter too. Long term, it could lead to far greater problems. There is little about actually building homes, or supporting building homes. Supply, at some point, has got to get nearer to demand.
It will be interesting, by the way, to see Nicola Sturgon respond to this policy. She has declared herself against everything Margaret Thatcher stood for, yet grew up in a home her parents bought under Mrs T’s ‘Right-to-buy’ legislation.
The one other interesting bit of ideology is the official inclusion of the threatened legislation on strike ballot turnout thresholds on the unions. There will be turnout thresholds for most unions and for some like health, education etc professionals, 40% of the total membership of the Union will have had to have voted yes to the strike for it to be legal. The Tories did warn about this, but it is still quite stark to see it in print. There have already been some complaints about this on social media, asking why unions should have a threshold when those who are elected to govern don’t. But this is a classic logical fallacy (as I explain here), because our vote in an election affects us, so if we don’t vote it’s our problem, but a union strike ballot affects me as a parent, so if some union members don’t vote, it not only affects them but all consumers of the service they provide, so it is different.
Anyway, there we go then, the two major parties have released their manifestos. Very different in tone. Labour is far more ambitious in terms of the changes to how society works whereas Conservatives far more “let us carry on the job”. We should remember that in the age of coalition government neither of these manifestos may need to be adhered to, as they can negotiate away anything they don’t really mean and blame it on coalition. But, still, at least we have an idea of what the next five years could look like. In summary, far less comfortable if you are rich under Labour…..er, hello? Are you still here?!