Policy Comparison 3 - Economy

Today we’re going to be looking at the different parties economic policies as listed on Vote for policies. I don’t pretend to be an economic expert who can cost out all these suggestions. I’m also rather sceptical of the claims of all the parties that their proposals balance. I suspect that there’s more than a little creative accountancy at work there. Realistically, I don’t think anybody’s going to be able to reduce Britain’s deficit without both raising taxes in some way and cutting services in others. Therefore rather than treat these policy statements as gospel, I’m going to see them as indicators of where they might try to find the balance in that equation – what would be their guiding principles. I’m also going to try this in a slightly different method – rather than comment on every point, I’m going to let the policies stand and give my thoughts after each one. So, here goes, in no particular order:

CONSERVATIVE

• This Party will hold an emergency Budget within 50 days of taking office to set out a credible plan to eliminate in large part the structural current budget deficit over a Parliament. The first measures will start to take effect this year.
• Cutting government spending. We will protect health spending in real terms and honour our commitments on international aid, but there will be cuts in many other departmental budgets.
• A one year public sector pay freeze in 2011 (this won't affect the one million lowest paid workers).
• Bringing forward the date at which the state pension age starts to rise to 66 to no earlier than 2016 for men and 2020 for women.
• Stopping tax credits to families with incomes over £50,000.
• Work with employers and industry to support auto-enrollment into pensions for those on middle and lower incomes.
• Restore the link between the state pension and average earnings.
• Rewarding those who have saved for their retirement by ending compulsory annuitisation at age 75.

This seems to me to be as much about trying to create alarms about Labour than offering a solution – hence the need for an “emergency” budget, etc... Combined with their pledge to cancel the employers NI rise, this seems to be a policy very much geared to favouring business, cutting taxes where possible, which (whatever they say) will mean greater cuts in services. I think the net result of that is to hit those already worst off. It runs counter to my political intuitions. The one thing I do like here is the pledge to protect the spending on international aid – I hope if we do get a tory government they will manage to uphold that pledge.


LIB - DEMS
• We propose to raise the threshold at which people start paying income tax from current levels to £10,000.
• This Party will identify lower priority spending that we believe can be cut so that we can protect vital front line public services.
• We will also rebalance the tax system cutting taxes for people on low and middle incomes which we will pay for by cutting reliefs and closing tax loopholes that benefit the wealthiest.
• This party will restore the link between annual increases in the state pension and earnings that will mean pensioners share in the proceeds of growth in our economy.
• Keep young people within reach of the job market and we will do this by paying any young person completing an internship or work experience £55 a week for three months.
• We will increase the number of apprenticeships, and places on university and vocational higher education courses so young people can improve their skills and get qualifications that will help them capitalise when the job market recovers.
• No young person will spend more than three months unemployed without getting financial support to access training, education, work experience or specialist professional help.
• Cut the rate of corporation tax to be funded through the removal of complex reliefs.

Whilst I remain sceptical about the ability of closing loopholes, etc... to pay for the changes they propose, I admire the desire to make the tax system fairer by lowering the burden on those with least. Similarly, I would be broadly supportive of the measures outlined here to help young people who are unemployed. On balance, I like where they’re coming from, but am unsure how wholeheartedly they’d be able to follow through.

UKIP

• Raise the tax-free personal allowance to £11,500 - no tax on the minimum wage.
• Merge existing income tax bands and employee's National Insurance contributions into a single flat income tax at a rate of 31%.
• Reduce the top rate for capital gains tax to 31% and scrap inheritance tax altogether.
• Eliminate employers' national insurance over 5 years.
• Scrap burdensome, politically correct Quangos to save roughly £18bn.
• Transfer 2 million public sector workers who do not provide an essential frontline service or do not support the provision of an essential front line service to the private sector through tax reductions.
• Eliminate damaging EU regulations like the working time directive, agency workers directive, battery directive etc.

A curious mix again from UKIP – some progressive measures (they’d raise the tax-free personal allowance higher than the Lib-Dems, but also cutting out all employers NI really makes me doubt their sums!), but also the usual anti-Europe rhetoric and meaningless right wing speak about “burdensome politically correct Quangos”. I really hate the idea about transferring 2 million public sector workers to the private sector – it would create a horrendous mess and the loss of much needed skills and experience.


LABOUR

• Providing a guarantee of a job or training place this year for any 18-24 year old who has been unemployed for over six months.
• Develop the Future Jobs Fund, worth £1bn, will create 170,000 jobs, of which at least 120,000 will be targeted at 18-24 year olds and the remaining 50,000 will be targeted at unemployment hotspots. To date, the fund has created around 104,000 jobs.
• Help people stay in their homes through schemes that help them with their mortgage interest payments and schemes like Homeowners Mortgage Support, where borrowers who have lost their income can reduce and postpone mortgage payments until their financial circumstances improve.
• This Party supports doubling of the main capital allowance rate to 40%, giving increased tax relief, allowing businesses to plan ahead and invest in their companies.
• This party believes there is a role for government to play in giving industrial sectors the necessary support to allow them to flourish. We will therefore invest in the industries of the future, such as low carbon, biotechnology, advanced bioscience and cutting edge advanced manufacturing.

There’s a lot to recommend this – the Future Jobs Fund, the Mortage Support, support for low carbon technology, etc... I’m still sceptical, but it looks good on paper. I would say the plans for young people convince me less than the Lib Dems. Guaranteeing training places tends to lead to the creation of rather meaningless courses, in order for there to be somewhere for these young people to be in training or employment, whereas the Lib-Dem policy seemed to be more about incentivising and supporting young people to engage with what was there, along with creating more apprenticeships, which is a real need.


GREEN

• This Party will implement a £45 billion investment to create 1 million jobs and lay the foundations for a sustainable and fair society. As part of this we will;
• Regulate banking and close tax loopholes.
• Invest massively in renewable energy and energy efficiency.
• Invest in public transport and in waste management.
• Create more affordable housing for rent.
• Provide free insulation for homes, schools and hospitals.
• Introduce green workforce training
• Provide decent pensions and free social care for older people.

This is just beautiful – they are describing the sort of society I would love to love in. I suspect its economically impractical, more of a dream really, but one which goes beyond the immediate financial pressures to more long term problem. Public transport, free insulation, renewable energy – it’s great. If only...


BNP

• The nurturing and encouragement of new and existing British industries.
• The protection of British companies from unfair foreign imports.
• The promotion of domestic competition.
• Increased taxes on companies which outsource work abroad.
• The reintroduction of the married man's allowance.
• The raising of the inheritance tax threshold to £1 million.
• The encouragement of savings, investment, worker share-ownership and profit-sharing.
• Halving council tax by centralising education costs and eliminating multiculturalism spending and unnecessary bureaucracy.
• The renationalisation of monopoly utilities and services, compensating only individual investors and pension funds.
• Slash billions off government spending by ending the £9 billion foreign aid budget, the £4.5 billion a year wars in Iraq and Afghanistan, and the billions pumped into the EU swindle.
• Halving council tax by centralising education costs and eliminating multiculturalism spending and unnecessary bureaucracy.
• The abolition of fees and the restoration of full grants to university students studying proper subjects (as opposed to fake "social sciences").
• Jobs to be created through free trade agreements by entering NAFTA and working with ASEAN states.

And after the beauty of the Greens, the ugliness of the BNP, which is I’m sure equally badly costed, but with added hate. In particular, I don’t like the axing of foreign aid, I can’t see much saving in eliminating multiculturalism, I assume that they don’t like fake Social sciences, because they encourage people to think and see through things like BNP rhetoric. To give them their due, I almost like the idea of renationalisation of utilities, but can’t see it as practicable. In the age of multinational corporations, there’s almost something quite quaint in their banging on about British industry and companies, although the idea of joing NAFTA is quite bizarre.

Summary

If I have to put them in order, it would be:

1. Labour – don’t trust them to actually do it, but on paper, their policy is the most realistically attractive.
2. Lib-Dems I trust them slightly more, but like the policy slightly less.
3. Greens. There have some lovely ideas which i wish the country was in a place it could really act on them.
4. Conservatives. Now we’re onto policies which are starting to move more in a direction I don’t want to go.
5. UKIP Slightly confused, but on the whole moving more in that direction
6. BNP And now we’ve gone too far down that road for it to be bearable.

Next up, Education.