Filling the hole: how do the three main UK parties plan to repair the public finances?

Transcription

1 Filling the hole: how do the three main UK parties plan to repair the public finances? Carl Emmerson

2 Summary (/) Large fiscal tightening required by all three parties Conservatives plan to start and finish sooner to 7: Conservatives would borrow % less than Labour & the Liberal Democrats would debt to return to % of GDP in under all three parties Bigger differences in planned ratio of spending cuts to tax rises Labour :; Liberal Democrats (eventually) ½: and Conservatives : two 99 Conservative Budgets planned for : ratio Labour and Conservatives plans imply further tax raising measures

3 Summary (/) All plans imply deep cuts to spending on public services Labour & Liberal Democrat plans imply tightest sustained squeeze since April 97 to March 98 spending cuts as deep as Conservative plans imply not delivered over any sustained period since Second World War Very little detail from any of the parties Liberal Democrats slightly less bad on this score than the other two but they would have the most to find in and 7 Would any of the parties deliver cuts to public services on this scale? alternative is significant tax increases and/or welfare cuts

4 Timing and size of the fiscal tightening Repair job =.8% of GDP, 7bn 7 Note and sources: Figure..

5 Timing and size of the fiscal tightening Same target for all parties 7 Note and sources: Figure..

6 Timing and size of the fiscal tightening Labour: year tightening from April 7 Note and sources: Figure..

7 Timing and size of the fiscal tightening Liberal Democrats: as Labour ( year tightening from April ) 7 Note and sources: Figure..

8 Timing and size of the fiscal tightening Conservatives: start & finish sooner ( year tightening from July ) 7 Note and sources: Figure..

9 Public sector net borrowing profiles 8 Labour Liberal Democrats Conservatives Over 7 years from April borrowing would be: Labour & Liberal Democrat = billion Conservatives = billion 9 7 Note and sources: Figure..

10 Percentage of national income Debt high for a generation 8 7 Debt below % of GDP Labour & Liberal Democrats & Conservatives = Labour Liberal Democrats Conservatives Note and sources: Figure..

11 Composition of discretionary fiscal tightening 7 Note and sources: Figure..

12 Composition of discretionary fiscal tightening Spending Taxation 7 Note and sources: Figure..

13 Composition of discretionary fiscal tightening Spending Taxation Labour: : spending cut to tax rises 7 Note and sources: Figure..

14 Composition of discretionary fiscal tightening Spending Taxation Liberal Democrats: ½: spending cut to tax rises 7 Note and sources: Figure..

15 Composition of discretionary fiscal tightening Spending Taxation Conservatives: : spending cut to tax rises 7 Note and sources: Figure..

16 Percentage of national income Total spending and revenues Spending Revenues Labour: spending down to level taxes up to level Note and sources: Figure..

17 Percentage of national income Total spending and revenues Spending Revenues Liberal Democrats: spending down to level taxes up to level Note and sources: Figure..

18 Percentage of national income Total spending and revenues Spending Revenues Conservatives: spending down to level taxes up to 7 level Note and sources: Figure..

19 No more tax rises? Labour 7 billion tax increase in pipeline (April to March ) further 7 billion required by 7 Conservatives billion net tax cut on top of the increases in the pipeline would need to reverse billion of this by 7 Liberal Democrats billion net tax increase on top of the increases in the pipeline might not need to do anything further