General Election 2010: IFS attacks …
Wednesday, April 28th, 2010 Uncategorized.
No party is ‘anywhere close’ to outlining cuts
Labour has said least about where axe would fall
Government blamed for not holding spending review
Tory cuts would be worse since Second World War
Lib Dem plans ‘misguided’ and ‘highly speculative’
Britain’s political leaders were today accused of deceiving the public over the astonishing scale of the tax rises and spending cuts needed to restore Britain’s battered public finances.
In a devastating verdict on the honesty of all three main parties, the independent Institute for Fiscal Studies said they were not telling the public the truth about the budget crisis, which has left a long-term gap between tax receipts and spending estimated at Ј69billion a year.
The respected think tank warned that hefty tax rises, coupled with some of the toughest spending cuts since the Second World War would be imposed, regardless of who wins the election.
Labour was singled out as the worst offender, with the IFS identifying a hidden Ј7billion tax bombshell in its plans – equivalent to Ј270 for every family in Britain.
In total, Labour will raise taxes by almost Ј23billion, equal to Ј877 for every family.
Keeping quiet about cuts: Gordon Brown on the campaign trail in Glasgow today
The think tank said Labour’s tax plans, which include a controversial ‘jobs tax’, were ‘not an attractive package, even given the need to raise resources’.
The IFS also revealed that Labour has publicly identified just 13 per cent of the public spending cuts it needs to make – leaving Ј52.5billion of cuts to be announced after the election.
Labour was also accused of failing to act ‘responsibly’ by cancelling a pre-election Government spending review which would have forced all three parties to come clean about the scale of the cuts ahead.
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IFS director Robert Chote said all three parties were ‘particularly vague’ about the public spending cuts required.
He added: ‘Repairing the public finances will be the defining task of the next government. For voters to make an informed choice, parties need to set out clearly how they would go about it. Unfortunately they have not.
‘The blame for this lies primarily with the current Government’s refusal to conduct a spending review before the election. It claims that it cannot do this until the autumn, because the outlook for the public finances is uncertain.
‘But uncertainty is a fact of fiscal life – any responsible government would face up to it and seek to reduce it, not use it as something to hide behind.’
Eye on the ball: David Cameron playing table tennis at the Bolton Lads and Girls Club
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The IFS said the spending cuts planned by both Labour and the Liberal Democrats were the toughest since the late 1970s, when Britain was forced to go cap in hand to the International Monetary Fund for a bailout.
BUT LABOUR TARGET TORY ‘CUTS’
It’s terrible timing as it has been accused of being the least honest of the three main parties on spending cuts but Labour have made a new election broadcast accusing the Tories of keeping quiet about savings.
In the video, to be broadcast tomorrow, which shows an army of grim-faced bureaucrats stalking the streets issuing grave warnings to happy families.
A family eating breakfast are told child tax credits will go, another is told those with incomes above Ј16,000 will lose the Child Trust Fund
It ends with a worried couple on their way to hospital told the Tories would end the right to see a cancer specialist within two weeks of being referred.
The broadcast warns: ‘The Tories don’t want you to know what they would cut if they win on May 6.’
Shadow health secretary Andrew Lansley said: ‘This election broadcast is extraordinarily cynical, particularly as it comes so soon after Labour upset so many cancer sufferers by targeting them with scaremongering breast cancer leaflets.
‘Having already upset so many people with their original scaremongering any decent party would not have engaged in this sort of low politics again in the campaign – but not the Labour Party.
‘They have run out of ideas and are now resorting to the tactics of smear and fear in order to bully people into voting for them.’
Tory plans are tougher still, with the IFS suggesting they would require the most savage cuts imposed by any Government since the Second World War.
The think tank questioned whether the planned cuts put forward by the three main parties could be achieved.
Mr Chote said history suggested the parties were being ‘overambitious’ about how much could be cut from public expenditure, suggesting that the next government would have to rely much more on ‘tax increases and welfare cuts’ than anyone was currently admitting.
He said a rise in VAT was the ‘bookies favourite’ for a post-election tax hike. And he described cuts in welfare spending as ‘the dog that has not barked’.
Mr Chote also dismissed as ‘misleading’ claims from both Labour and the Tories that much of the pain could be avoided through efficiency savings.
The IFS said Tory arithmetic suggested at least another Ј3billion of tax rises would be needed. And it accused the Conservatives of identifying just 17 per cent of the spending cuts needed – leaving a black hole of Ј52.5billion to be revealed after the election.
The IFS said Lib Dem plans for an extra Ј19.7billion in tax rises would be enough to meet its aims, although it warned that plans to raise more than Ј4billion by closing tax loopholes were ‘highly speculative’.
It said the Lib Dems had identified only 26 per cent of the spending cuts needed – leaving Ј34.4billion unexplained. Lib Dem plans for a Ј5billion raid on the pensions of higher rate taxpayers were described as ‘fundamentally misguided’.
Shadow Treasury chief secretary Philip Hammond acknowledged that no party had set out the details of how they would reduce public spending.
But he said the Government’s cynical decision to cancel the planned spending review made it impossible for opposition parties to go into more detail.
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