After the Tories sprayed money around like Swedish socialists at their manifesto launch, Labour calculated that the party had made £25bn of unfunded commitments: £8bn on the NHS, £6.5bn on raising the personal tax allowance to £12,500, £3.9bn increasing the 40p threshold to £50,000, £360m freezing rail fares for five years, £1.2bn on paid volunteering leave, £4.5bn on extending the Right to Buy to housing association tenants and £1.2bn on increasing free childcare to 30 hours a week. The opposition concedes that the Tories have identified £1.42bn of revenue but that still leaves a black hole of £24.95bn.
It’s an impressive number but one that is unlikely to mean much to most voters. But Ed Balls, a man adept at turning dry statistics into weapons of political war, has produced a new, more potent figure. In a spech tomorrow in the west midlands, the shadow chancellor will announce that the Tories’ unfunded £25bn is the equivalent of £1,439 a year for every working household in Britain. He will say:
Three weeks today voters go to the polls. It’s time for the Tories to come clean and explain: Where is the money coming from? How will you pay for your panicky promises? Who will pay the price? The Tories think they can get away with ducking these questions. It’s no wonder David Cameron isn’t turning up the debate tonight and has done everything he can to avoid a head-to-head debate. But the Tories can’t just brush these questions under the carpet.
So who will pay the price of these £25 billion of promises which the Tories can’t say how they will pay for? David Cameron and George Osborne say ‘look at our track record’. And their track record shows it won’t be those with the broadest shoulders who will be asked to make a bigger contribution. Just look at how they have given a huge tax cut to millionaires, opposed Labour’s mansion tax for the NHS and refused to repeat the bank bonus tax. And look at how they have asked working people to pay more by raising VAT and cutting tax credits. £1100 a year more on average for every household, according to the Institute for Fiscal Studies.
And everyone knows it will be working families who end up paying the price again if the Tories win the election. The Tories have now racked up £25 billion a year of promises which they refuse to explain how they will pay for. £25 billion is the equivalent of £1,439 a year for every working household in Britain. That’s the price working families will pay under the Tories for panicky promises made in the middle of a desperate campaign.
The Tories’ wager, as I wrote last week, is that their economic reputation is robust enough for them to get away with spending commitments that Labour could never afford (some polls show them more than 20 points ahead on the economy). To do otherwise, they believe, would be to waste one of their most precious assets. They have earned political capital and they are spending it.
But Balls’s stat, which fuses the Tories’ new profligacy with their reputation as “the party of the rich” (one that cut taxes for the highest-earners while raising VAT), shows how their fiscal promiscuity could yet them harm. As he notes, to many voters, their “track record” is cause not to trust them.
Balls will also tomorrow repeat his pledge to allow the OBR to audit parties’ tax and spending commitments in future elections. He will say:
Two years ago I said the Office for Budget Responsibility should be allowed independently to audit the manifesto spending and tax commitments of the main parties.It’s a move which I believed would have helped improve trust in politics and the quality of debate in this election campaign. We challenged George Osborne to back this move and give the OBR the power to do this. He repeatedly blocked this idea.
And now we know why. Because he did not want the OBR to confirm that every spending and tax commitment in Labour’s manifesto is indeed fully funded. And he did not want his own manifesto subject to independent scrutiny. But that doesn’t mean he will escape scrutiny. Because for the next three weeks we and the British people will challenge them every day to explain where the money is coming from. The Tories are taking the British people for fools and they shouldn’t be allowed to get away with it. And in the future we’ll make sure they can’t. We will legislate not only to allow the OBR to independently audit the manifesto spending and tax commitments of the main parties where they want that to happen. We will legislate to require the OBR to do so. And today I call on the other main political parties to say they will support this legislation.
Just as Ed Miliband’s performance in the TV debates showed why David Cameron was determined to avoid a head-to-head contest with him, so the Tories’ profligate prospectus has shown why they vetoed Balls’s OBR proposal.