General election 2024: ‘Conspiracy of silence’ from Tories and Labour over tax plans in manifestos, thinktank IFS says

Published

11 months ago

June 24, 2024

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Voters have been left in the dark over how the major parties will be able to fund their spending commitments, a respected thinktank has said, offering just “thin gruel”.

The Institute for Fiscal Studies (IFS) took further aim at what it described as a “conspiracy of silence” from both the Conservatives and Labour on how they could meet the challenges they identify, such as reducing NHS waiting lists.

Launching its report on the crucial documents, IFS director Paul Johnson warned that spending on many public services would likely need to be cut over the next parliament unless government debt was to rise or taxes increased further.

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He pointed to pressure from a 60-year high in government debt levels at a time of a near-record tax burden.

Much of the blame for this was a £50bn a year increase in debt interest spending relative to forecasts, he explained, and a growing welfare budget in the wake of the COVID pandemic and cost of living crisis that followed Russia’s invasion of Ukraine.

“We have rising health spending, a defence budget which for the first time in decades will likely grow rather than shrink, and the reality of demographic change and the need to transition to net zero,” Mr Johnson said.

“Add in low growth and the after-effects of the pandemic and energy price crisis and you have a toxic mix indeed when it comes to the public finances.”

“These raw facts are largely ignored by the two main parties in their manifestos”, he declared, describing the information presented to voters as a “knowledge vacuum”.

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The main verdict on tax

“In line with their unwillingness to face up to the real challenges, neither main party makes any serious new proposals to increase taxes”, Mr Johnson said.

“Consistent with their conspiracy of silence, both are keeping entirely silent about their commitment to a £10bn a year tax rise through a further three years of freezes to personal tax allowances and thresholds.

“Both have tied their hands on income tax, NICs, VAT and corporation tax. The Conservatives have a long list of other tax rises, and reforms, that they wouldn’t do. Labour have ruled out more tax options since the publication of the manifestos.

“Taken at face value, Labour’s promise of no tax increases on working people” rules out essentially all tax rises. There is no tax paid exclusively by those who don’t work. Who knows what this pledge is really supposed to mean,” he concluded.

What about the other parties?

The IFS said the Liberal Democrats had bigger tax and spend policies than Labour or the Conservatives.

It also determined that Reform UK and the Greens offered much bigger numbers but declared that what they propose is “wholly unattainable”, helping to “poison the entire political debate”.

Mr Johnson concluded: “The choices in front of us are hard. High taxes, high debt, struggling public services, make them so.

“Pressures from health, defence, welfare, ageing will not make them easier. That is not a reason to hide the choices or to duck them. Quite the reverse. Yet hidden and ducked they have been.”

Politics

‘No doubt’ UK will spend 3% of GDP on defence in next parliament, defence secretary says

Published

4 hours ago

May 31, 2025

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'No doubt' UK will spend 3% of GDP on defence in next parliament, defence secretary says

There is “no doubt” the UK “will spend 3% of our GDP on defence” in the next parliament, the defence secretary has said.

John Healey’s comments come ahead of the publication of the government’s Strategic Defence Review (SDR) on Monday.

This is an assessment of the state of the armed forces, the threats facing the UK, and the military transformation required to meet them.

Prime Minister Sir Keir Starmer has previously set out a “clear ambition” to raise defence spending to 3% in the next parliament “subject to economic and fiscal conditions”.

Mr Healey has now told The Times newspaper there is a “certain decade of rising defence spending” to come, adding that this commitment “allows us to plan for the long term. It allows us to deal with the pressures.”

A government source insisted the defence secretary was “expressing an opinion, which is that he has full confidence that the government will be able to deliver on its ambition”, rather than making a new commitment.

The UK currently spends 2.3% of GDP on defence, with Sir Keir announcing plans to increase that to 2.5% by 2027 in February.

This followed mounting pressure from the White House for European nations to do more to take on responsibility for their own security and the defence of Ukraine.

The 2.3% to 2.5% increase is being paid for by controversial cuts to the international aid budget, but there are big questions over where the funding for a 3% rise would be found, given the tight state of government finances.

While a commitment will help underpin the planning assumptions made in the SDR, there is of course no guarantee a Labour government would still be in power during the next parliament to have to fulfil that pledge.

A statement from the Ministry of Defence makes it clear that the official government position has not changed in line with the defence secretary’s comments.

The statement reads: “This government has announced the largest sustained increase to defence spending since the end of the Cold War – 2.5% by 2027 and 3% in the next parliament when fiscal and economic conditions allow, including an extra £5bn this financial year.

“The SDR will rightly set the vision for how that uplift will be spent, including new capabilities to put us at the leading edge of innovation in NATO, investment in our people and making defence an engine for growth across the UK – making Britain more secure at home and strong abroad.”

Sir Keir commissioned the review shortly after taking office in July 2024. It is being led by Lord Robertson, a former Labour defence secretary and NATO secretary general.

The Ministry of Defence has already trailed a number of announcements as part of the review, including plans for a new Cyber and Electromagnetic Command and a £1bn battlefield system known as the Digital Targeting Web, which we’re told will “better connect armed forces weapons systems and allow battlefield decisions for targeting enemy threats to be made and executed faster”.

On Saturday, the defence secretary announced a £1.5bn investment to tackle damp, mould and make other improvements to poor quality military housing in a bid to improve recruitment and retention.

Mr Healey pledged to “turn round what has been a national scandal for decades”, with 8,000 military family homes currently unfit for habitation.

He said: “The Strategic Defence Review, in the broad, will recognise that the fact that the world is changing, threats are increasing.

“In this new era of threat, we need a new era for defence and so the Strategic Defence Review will be the vision and direction for the way that we’ve got to strengthen our armed forces to make us more secure at home, stronger abroad, but also learn the lessons from Ukraine as well.

“So an armed forces that can be more capable of innovation more quickly, stronger to deter the threats that we face and always with people at the heart of our forces… which is why the housing commitments that we make through this strategic defence review are so important for the future.”