Conservative and Labour spending plans lack credibility – IFS



LONDON (Reuters) – Neither Prime Minister Boris Johnson’s Conservatives nor the opposition Labour Party have credible plans to manage Britain’s public finances, the Institute for Fiscal studies think tank said on Thursday, two weeks before a national election.

The governing Conservatives, ahead in the polls, published an election manifesto on Sunday that promised more public sector spending and no further extensions to the protracted departure from the EU.

They also pledged no new taxes, drawing a distinction with the Labour Party that has promised to raise taxes on the rich and businesses to fund a major expansion of the state.

“Neither is a properly credible prospectus,” said Paul Johnson, director of the IFS.

“Should they win this time it is highly likely that the Conservatives would end up spending more than their manifesto implies and thus taxing or borrowing more,” he added.

Labour would be unable to deliver the spending increases on the scale promised, Johnson said.

“The public sector doesn’t have the capacity to ramp up that much, that fast,” he said.

Earlier on Thursday, the Resolution Foundation think tank said spending promises meant both parties looked likely to break their own fiscal rules.

“Taking huge risks with the brand new fiscal rules that are supposed to bind the next government for its whole time in office risks seriously undermining the UK’s economic credibility, at a time when it is already under strain,” said Resolution Foundation research director James Smith.

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