Both Conservative and Labour manifestos threaten public services, IFS warns

Influential research institute says main parties’ policy proposals – including on public-sector pay – mask the real choices facing the nation and their consequences


By Jim.Dunton

26 May 2017

The Houses of Parliament Credit: PA

The general election policies proposed by both the Conservative Party and the Labour Party pose fundamental threats to the quality of public services – but for different reasons, the Institute for Fiscal Studies has said.

An analysis by the influential research institute also saw its deputy director, Carl Emmerson chastise both Theresa May and Jeremy Corbyn’s flagship documents for failing to set out “an honest set of choices” to voters ahead of the June 8 poll.

The IFS manifesto comparison said the Conservative manifesto simply offered a continuation of cuts already promised, with “additional funding pledges” on the National Health Service and schools merely confirming that spending would rise in a way that was broadly consistent with the March Budget.


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However, Emmerson said while Theresa May’s broad offer was a relatively smaller state with lower taxes, it came with “unacknowledged risks” to the quality of public services and tough spending choices “exemplified” by the backlash that greeted the manifesto's original social care funding plans.

“For the Conservatives 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,” he said.

“Their tight immigration targets would, if delivered, also damage the economy and the tax base.”

On Labour’s manifesto pledges, the IFS said it was a “pretence” to suggest that a projected need for an extra £49bn in tax revenues could all be borne by faceless corporations and the rich.

Emmerson said Labour risked not being able to raise anything like the tax revenues required for measures such as scrapping university tuition fees, expanding the provision of free childcare, and abolishing the 1% annual pay cap for public sector workers.

He added: “The second [risk] is that some of the proposed tax increases, alongside the very big increase in the minimum wage, and other labour market regulation, would turn out to be economically damaging.”

On public sector pay, Emmerson said both parties’ strategies could have negative consequences.

“The big question regarding the deliverability of Conservative spending plans is well illustrated by choices over public sector pay,” he said.

“Continuing with a 1% cap would take pay levels in the public sector to easily their lowest relative to the private sector in recent decades, with problems of recruitment, retention and morale possible outcomes.

“Labour’s plans, by contrast, imply public sector employers facing a £9bn a year increase in employment costs.”

“The shame of the two big parties’ manifestos is that neither sets out an honest set of choices,” he concluded. “Neither addresses the long term challenges we face.”

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