The Tory party’s sums don’t add up

There is, to put it mildly, a lack of candour in this election campaign when it comes to tax rises and spending cuts. The Conservatives are trying to force Labour into a game of Whac-a-mole over which taxes it would put up and which rises the party is happy to rule out. Whoever is in power will have to find the money from somewhere, whether that’s through hiking tax or slashing spending. Neither party is being very open about that, though.

Perhaps the power is draining away so rapidly from the Tories that their own assertions about spending aren’t getting the scrutiny they deserve. If taxes aren’t going up massively, then spending has to be cut, and one of the policies Rishi Sunak and his colleagues are leaning heavily on is welfare cuts. The argument is that the welfare bill is rising ‘unsustainably’, with the manifesto promising: ‘With fewer people moving onto welfare and more people in work fulfilling their potential, we will save taxpayers £12 billion a year.’

As with the tax debate, this claim isn’t all it seems. The Institute for Fiscal Studies warns that some of the policies outlined in the manifesto ‘were previously announced by the government and have therefore already been incorporated by the OBR into their forecasts and so cannot be relied upon for further savings to pay for further tax cuts. Others, such as accelerating the rollout out universal credit, are simply small.’ The think tank’s analysis warns that ‘it is difficult to have much confidence in the £12 billion goal’. 

This £12 billion is supposed to go some way to financing the Conservatives’ tax cuts in the next parliament, along with greater productivity in the public sector. In both instances, if the cuts aren’t delivered, the failure could presumably be blamed on people not going back into work and the people who are in work not working hard enough. The reality, though, is that the sums were wrong from the outset.