Nicola Sturgeon launches the SNP's manifesto in Edinburgh earlier this week. Photograph: Getty Images.
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SNP's anti-austerity rhetoric does not reflect its plans, says the IFS

The party is forecast to spend less than Labour and the Lib Dems by the end of the parliament through slower but longer austerity. 

When the SNP launched its manifesto earlier this week it was with a demand to for the next UK government to "end austerity". But the rhetoric does not match the reality. The IFS has today published its assessment of the main parties' fiscal plans, concluding that the gap between the SNP and its rivals, Labour and the Lib Dems, is far smaller than suggested. 

It found that while the SNP would increase total public spending in real terms each year (by 0.5 per cent) "departmental spending would be broadly frozen between 2014–15 and 2019–20, and departmental spending outside of the NHS and aid could be facing a cut of 4.3 per cent". Real-terms cuts to all departments between 2010-11 and 2019-20 would amount to 9.1 per cent under the SNP, 12.1 per cent under the Conservatives, 5.9 per cent under the Lib Dems and 4.6 per cent under Labour. In the case of unprotected areas (everything excluding international development, the NHS and education), the SNP is forecast to cut by 22.2 per cent, the Tories by 27.6 per cent, the Lib Dems by 18.3 per cent and Labour by 13 per cent.

"Their stated plans do not necessarily match their anti-austerity rhetoric," the IFS concludes of the SNP. Indeed, as the graph below shows, Labour could be outspending the party by 2018-19 with the Lib Dems surpassing them in 2019-20. While the SNP's plans "imply a slower pace of austerity than those of the other three parties", they ultimately mean "a longer period" too. The nationalists' commitment to ensure that the deficit and the national debt fall "in every year as a share of national income" means that they have less room for manoeuvre than commonly assumed.

Labour could outspend the SNP

It's important to note that IFS's projections assume that Labour would make maximum use of the flexibility built into its fiscal rules: to balance only the current deficit (leaving room to borrow for capital investment) and to reduce debt as a share of GDP "as soon as possible" (rather than by a particular year). Whether Ed Miliband would do so would depend on the economic and political circumstances he encountered in office. But even with this caveat, the distance between Labour and the SNP is nowhere near as great as Nicola Sturgeon claims. 

But while she has chosen to put a profligate spin on her plans, Miliband has chosen to put a frugal spin on his, devoting the first page of Labour's manifesto to fiscal responsibility and refusing to explicitly pledge to borrow to invest. The priority, he resolved, was combating his party's profligate reputation. Whether that was the right choice will be determined by the outcome on 7 May. 

George Eaton is political editor of the New Statesman.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.