Conservative figures ‘do not add up’

THE Tories’ plans are not entirely credible as the party will probably end up spending more than their manifesto implies, the Institute for Fiscal Studies said.

The think-tank said it was ‘highly likely’ that a Tory government would end up having to put up taxes or borrow more.

It warned that if Boris Johnson took the UK out of the Brexit ‘transition’ period without reaching a trade deal in 2020, the economy would suffer and the country might have to return to austerity.

The IFS also criticised the Prime Minister for having no concrete proposals to solve the social care crisis. And it pointed out that some proposals in the Tory manifesto – from new hospitals to better rail links in the North of England – were uncosted.

IFS director Paul Johnson said the chances of the Conservatives being able to hold spending down over the course of a five-year parliament in the way that they proposed appeared to be ‘remote’. ‘Why have they been so immensely modest in their proposals?’ he said.

‘Because to do otherwise would either mean resiling from their pledge to balance the current budget or would mean being up front about the need for tax rises to avoid breaking that pledge.’

He said that, if delivered, the Conservative plans would leave public spending – apart from health – still 14 per cent lower in 2023/24 than it was when David Cameron came to power in 2010-11.

‘No more austerity perhaps, but an awful lot baked in,’ he said. IFS deputy director Carl Emmerson warned there was still a risk of a No Deal Brexit under the Conservatives if Mr Johnson was unable to get a free trade deal with the EU by the end of 2020. Mr Emmerson said that would be ‘economically damaging’ and could mean a return to austerity if it resulted in a ‘big downturn’.

He suggested that, in the short term, borrowing would have to rise to even higher levels than that planned by Labour, with the national debt reaching up to 85 per cent of national income.

In order to repair the damage to the public finances, he said that a return to austerity would be ‘perhaps the most likely outcome’ in the medium term.

Stuart Adam, senior research economist at the IFS, criticised the Conservative manifesto’s pledge not to raise VAT, National Insurance or income tax.

‘This is a significant and unwelcome constraint on tax rises in future if they want to change tax rates, as Philip Hammond found in 2017,’ he said.