Tories are right to tackle social care crisis, says IFS

THE Institute for Fiscal Studies praised the Conservatives for taking steps to deal with the crisis in social care.

Deputy director Carl Emmerson congratulated the party for ‘attempting a nod’ to the increasing costs of an ageing society with measures such as means-testing the winter fuel payment and scrapping the pension triple lock.

But he said the plans to reduce benefits to the elderly would have a ‘trivial’ effect on spending levels.

And voters face another decade of austerity if Theresa May is returned to

Downing Street. The think tank warned that under Tory plans the deficit will still be significant by 2022 – meaning cuts would have to continue well into the subsequent parliament.

It said the Conservatives may be forced to put up taxes if, as is likely, it turns out the NHS needs more money than it has budgeted. And the IFS warned that the pledge to cut immigration to the tens of thousands could cause ‘considerable economic damage’ and reduce the amount raised in taxes. Mr Emmerson said there could be a ‘fourth parliament of austerity’ after 2022 because the deficit is not scheduled to be eliminated until the middle of the next decade.

‘For the Conservatives, the aim of overall budget balance remains, but not until the mid-2020s – beyond the end of the coming parliament,’ he explained. ‘On manifesto plans the deficit could still be around 1 per cent of national income by 2021/22, or around £21billion, leading potentially to a fourth parliament of austerity after that.’

The Tory manifesto meant ‘big cuts in welfare spending’, he said, adding: ‘It means another parliament of austerity for the public services, including an incredibly challenging period for the NHS and real cuts to per-pupil funding in schools.

‘It is not clear that this would be deliverable. Barely two months after the 2015 general election they announced spending plans that were less tight than in their manifesto.

‘Maybe they would do that again. I would not bet against a Conservative government finding some additional tax-raising measures.’ Mr Emmerson said plans to increase NHS spending by £8billion may not be enough, adding: ‘Given the scale of pressure the NHS is already under, there must be serious doubts as to the deliverability of such a tight spending plan.’

Referring to the immigration pledge, Mr Emmerson said it could cost as much as £12billion through lower tax take.

If effective, it would cause ‘considerable economic damage as well as creating an additional problem for the public finances’, he said. ‘The big risk is that, after seven years of austerity, they would not be able to deliver the promised spending cuts either at all or at least without serious damage to the quality of public services.’