‘No honest set of choices’ on economy, claim

Voters are not being offered an “honest set of choices” on tax and spending by the two main political parties amid concern over gaps and mistakes in their manifestos, an economic think-tank has claimed.

The Institute for Fiscal Studies (IFS) flagged up factual errors in Labour’s calculations, warning its tax hikes aimed at top earners and businesses may “not raise anything like” the £48.6bn claimed and that the party’s proposals could turn out to be “economically damaging”.

Britain could face “another parliament of austerity” under the Tories, the IFS warned, saying continued austerity could cause serious damage to the ability to deliver services and laying out serious doubts over the deliverability of its plans for the NHS.

It also condemned Conservative moves to curb net migration to 100,000, saying it risked a £6bn hit to the Exchequer.

Giving his assessment of the parties’ plans, IFS deputy director Carl Emmerson said: “The shame of the two big parties’ manifestos is that neither sets out an honest set of choices.

“Neither addresses the longterm challenges we face. For Labour we can have pretty much everything – free higher education, free childcare, more spending on pay, health, infrastructure.

“And the pretence is that can all be funded by faceless corporations and ‘the rich’. There is a choice we can make as a country to have a bigger state. That would not make us unusual in international terms. But that comes at a cost in higher taxes which would inevitably need to be borne by large numbers of us.”

Labour would “raise spending to its highest level since the mid1980s and tax to record levels in peacetime” and the IFS queried whether taxes such as the offshore tax levy and the cap on excess pay would generate income.

The think-tank also pointed to “risky” plans to boost corporation tax amid uncertainty over Brexit, while claiming that plans to boost the minimum wage could be “economically damaging”.

Referring to Labour’s plans, Mr Emmerson said: “Clearly one risk with Brexit is investment falls within the UK economy and clearly it may mean that it’s not the time to put up corporation tax significantly. It may be that is a particularly risky thing to do.”

Turning to the Tory manifesto, Mr Emmerson dismissed Prime Minister Theresa May’s proposals to means-test winter fuel payments for the elderly and scrap the pensions triple lock as making “wholly trivial” savings.

And he said the manifesto U-turn over a cap on care costs would result in “presumably increasing public spending overall”.

He said: “The Conservatives simply offer the cuts already promised. Additional funding pledges for the NHS and schools are just confirming that spending would rise in a way broadly consistent with the March Budget.

“Compared with Labour, they are offering a relatively smaller state and consequently lower taxes. With that offer come unacknowledged risks to the quality of public services, and tough choices over spending.”