Conservative commitments - 11, 10 fails

1.     Running a surplus by 2018

It’s necessary for every manifesto to have overall ambitions that help summarise the aims of other commitments. This is one such aspiration. On its own it is worthless, but I recognize that it is a necessary part of communication.

I do think we’ll find, however, that it’s not a plausible ambition. The Conservatives promised to eliminate the deficit by 2015 and failed. They will do so again by 2018. This policy is more dishonest vote-buying, promising the impossible without good justification or explanation. Such an extreme promise requires extreme evidence to support it, and that simply was not provided, even in all the supplementary policies.

I also find it surprising to see that the Conservatives claim that this will be the first surplus in 18 years, when Gordon Brown did have a surplus (if briefly) during the Labour years. It shows that there is huge variability in the figures depending on how you add them up and what you exclude. I wouldn’t trust either major party to have it right.

       We can’t cost this promise precisely because there’s no detail. The aim to run a surplus will instead cost the economy, as the Conservatives focus on austerity even harder to make up for their tax cuts. The true cost of austerity is social: unemployment, long-term poor prospects, especially for the young, with perhaps 5% higher poverty rates due to greater inequality. Even on its own, GDP, terms, austerity has failed, reducing growth and not helping the debt to GDP ratio. The total cost has been estimated at a cumulative £25bn/year. That means that it will be much larger by now; the TUC estimates that the total will be £374bn by 2016. The OBR puts it at 5% of GDP or a total of £70bn, although it tends to be favourable to government. These are losses to GDP, meaning that people’s salaries are lower and there is less employment; only 40% or so might come from government, so it’s a loss of £10bn/year for every year of austerity for government spending. That makes the general commitment to austerity of vital significance to the country, even though it directly affects no-one.