Talk to the hand, Nicola, because the face ain't listening. Photo:Getty
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SNP manifesto 2015: Less of a ransom note, more of a blank cheque

The SNP's manifesto, far from a ransom note, is easily reconciliable with Labour's fiscal plans. The bigger fear is that none of the parties are planning for what happens if the economy takes a turn for the worse.

Nicola Sturgeon launched the SNP’s manifesto yesterday with a plan to end austerity, and provide an alternative to the cuts proposed by the Conservatives and Labour. The SNP says it is “the only party offering an alternative to the Westminster cuts agenda”. It wants spending by Government departments to increase by 0.5% above inflation every year after 2015-16.

Former Conservative Prime Minister John Major will warn in a speech today of the “mayhem” which could result from a Labour government reliant on the SNP in the next Parliament, including the risk that the SNP will push Labour into more spending and more borrowing.

Setting the scare mongering to one side for a moment: could Labour accommodate the SNP’s demands and still meet its own manifesto pledge for securing the public finances?  The SNP proposal to increase departmental spending by 0.5% a year would mean current departmental spending going up by around £1.7 billion a year. This would leave departmental spending around £7 billion higher a year in real terms by 2020, compared to the first year of the new Parliament.

However, tax revenues are forecast to rise by around £20 billion to £23 billion a year over the course of the next Parliament. This means that the next Government can raise departmental spending and still eliminate the current deficit (Labour’s target, which excludes investment spending) by 2020 – just. The deficit would also be falling in every year.

Admittedly, Labour would not be able to meet the mandate in the Budget Responsibility Charter, that it voted for earlier in the year. That requires the Government to be on track for the current deficit to be eliminated by the end of a three year period. Currently, that’s 2018-19. But because it’s a rolling timetable, it allows for the flexibility to change the timing of the deficit reduction programme.  And Labour makes no reference to it in its manifesto, suggesting it does not see the Charter as its primary target.

Labour has already left itself considerable room on its deficit reduction plans: because it is targeting the current deficit, that is, excluding borrowing for investment, by 2020, it could have around £30 billion extra in annual spending to play with compared to the Conservatives. It also looks like it has enough room to accommodate the SNP. There is also remarkable agreement between the two on ways of raising money to pay for extra pledges – the mansion tax, the 50p rate of income tax and the bank bonus tax make an appearance in both manifestos.

In fact, the real risk is not so much that the SNP drags a Labour government in to more spending; Labour may be pretty much already there. The bigger risk is that all parties are making plans based on a very uncertain five year forecast.

The tax revenue figures in the OBR report rely on GDP growing by 2.3% to 2.6% a year. The IMF is less sanguine, expecting UK growth to plateau at around 2.1% a year by the end of the decade. Even that forecast implies that the UK’s dismal productivity performance will pick up substantially in the next five years. Previous OBR scenario analysis shows that deficit forecasts could be out by tens of billions if productivity does not pick up, as set out in the Social Market Foundation’s A Deficit of Growth. On current plans, that would leave the Conservatives unable to meet their target too. The gamble on tax revenues to fix the public finances is one that all parties are making.

 

Nida Broughton is Senior Economist at the Social Market Foundation.

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Theresa May’s stage-managed election campaign keeps the public at bay

Jeremy Corbyn’s approach may be chaotic, but at least it’s more authentic.

The worst part about running an election campaign for a politician? Having to meet the general public. Those ordinary folk can be a tricky lot, with their lack of regard for being on-message, and their pesky real-life concerns.

But it looks like Theresa May has decided to avoid this inconvenience altogether during this snap general election campaign, as it turns out her visit to Leeds last night was so stage-managed that she barely had to face the public.

Accusations have been whizzing around online that at a campaign event at the Shine building in Leeds, the Prime Minister spoke to a room full of guests invited by the party, rather than local people or people who work in the building’s office space.

The Telegraph’s Chris Hope tweeted a picture of the room in which May was addressing her audience yesterday evening a little before 7pm. He pointed out that, being in Leeds, she was in “Labour territory”:

But a few locals who spied this picture online claimed that the audience did not look like who you’d expect to see congregated at Shine – a grade II-listed Victorian school that has been renovated into a community project housing office space and meeting rooms.

“Ask why she didn’t meet any of the people at the business who work in that beautiful building. Everyone there was an invite-only Tory,” tweeted Rik Kendell, a Leeds-based developer and designer who says he works in the Shine building. “She didn’t arrive until we’d all left for the day. Everyone in the building past 6pm was invite-only . . . They seemed to seek out the most clinical corner for their PR photos. Such a beautiful building to work in.”

Other tweeters also found the snapshot jarring:

Shine’s founders have pointed out that they didn’t host or invite Theresa May – rather the party hired out the space for a private event: “All visitors pay for meeting space in Shine and we do not seek out, bid for, or otherwise host any political parties,” wrote managing director Dawn O'Keefe. The guestlist was not down to Shine, but to the Tory party.

The audience consisted of journalists and around 150 Tory activists, according to the Guardian. This was instead of employees from the 16 offices housed in the building. I have asked the Conservative Party for clarification of who was in the audience and whether it was invite-only and am awaiting its response.

Jeremy Corbyn accused May of “hiding from the public”, and local Labour MP Richard Burgon commented that, “like a medieval monarch, she simply briefly relocated her travelling court of admirers to town and then moved on without so much as a nod to the people she considers to be her lowly subjects”.

But it doesn’t look like the Tories’ painstaking stage-management is a fool-proof plan. Having uniform audiences of the party faithful on the campaign trail seems to be confusing the Prime Minister somewhat. During a visit to a (rather sparsely populated) factory in Clay Cross, Derbyshire, yesterday, she appeared to forget where exactly on the campaign trail she was:

The management of Corbyn’s campaign has also resulted in gaffes – but for opposite reasons. A slightly more chaotic approach has led to him facing the wrong way, with his back to the cameras.

Corbyn’s blunder is born out of his instinct to address the crowd rather than the cameras – May’s problem is the other way round. Both, however, seem far more comfortable talking to the party faithful, even if they are venturing out of safe seat territory.

Anoosh Chakelian is senior writer at the New Statesman.

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