The Institute for Fiscal Studies has delivered a damning verdict on the fiscal plans of the Conservative and Labour parties, describing neither as a “properly credible prospectus”. However, the think tank praised the Liberal Democrats’ proposal to increase income tax by 1p, calling it simple, progressive and revenue-certain.
Analysing the three main parties’ manifestos, the IFS highlighted that only the Lib Dems offered a decisive downward path for debt, aided by a growth dividend from scrapping Brexit. The party’s penny-on-income-tax rise was commended as a clear and reliable revenue raiser.
By contrast, the Conservatives faced scepticism over their pledge for modest spending increases. IFS director Paul Johnson warned that past form suggests the Tories would end up more generous, forcing a choice between tax hikes or breaking fiscal rules. A no-deal Brexit, if talks fail, could send the deficit soaring.
Labour’s tax and spending plans were found not to add up, with many outside the top 5% facing higher taxes. Johnson noted that other countries with similar state sizes tax average workers more than the UK. He also criticised Labour’s compensation plan for women affected by the state pension age rise, arguing it favoured a “relatively well-off group” over benefit cut victims.
