The Magic Money Tree Has Been Found
Who voters trust to manage the economy for the next five years is always a key decider in any election campaign. Recent convention has seen the Conservatives position themselves as fiscally stringent– reluctant to spend big and instead focusing on ‘living within our means’. Labour, meanwhile, have become known for public spending projects, fuelled in large part by increased borrowing and higher taxes on higher earners. However, this election is set against a backdrop of Brexit and lessons from 2017 have seen both parties commit to big spending pledges, to offer more to voters.
Sajid Javid and John McDonnell set out the Tories’ and Labour’s spending plans respectively on Thursday. Under the Tories, spending would rise to 41.3 per cent of GDP by 2023-24, while Labour’s plans would see spending grow to 43.3 per cent, according to the Resolution Foundation think tank. The Financial Times reported that this would effectively see state spending return to ‘1970s size’ levels. The Tories have since gone on the offensive, claiming Labour plans to spend £1.2tn over the next five years. Labour have dismissed this as ‘fake news’. In reality, while the claim is not likely to be far off the actual figure, it makes various assumptions about Labour’s spending which can’t really be made before the party launches its manifesto. Read more here.