Tories seem to be shredding their claim to economic competence with each new spending commitment

The Tories have gone on about economic responsibility and controlling spending for long enough. It’s bizarre, then, that their list of dubiously funded post-election spending commitments is getting longer by the day.

It’s not enough to say that the NHS will get the £8 billion it needs out of the proceeds of a stronger economy alone as Jeremy Hunt did this morning. That’s like making a commitment on a foundation of fresh air and marshmallow.

Asked how the Conservatives would fund the pledge, he said the economy had been turned around and pointed to investment in the service during the last Parliament, when the government guaranteed an above-inflation increase in funding.

He said: “If you want to be sceptical about the commitment, look at the track record.”

It’s not as if the global economy is in a particularly robust position to be able to rely on that.

We also have to remember that had the Tories been in government alone, they would have cut much further and deeper than the Coalition ended up doing which would have jeopardised the recovery. We know what happened the last time the Tories were in charge during a recession – mass unemployment, riots and incredible hardship for many. This time, in a much more perilous situation, we’ve got through it without as much pain, creating jobs all the way. It’s been far from easy, but the Liberal Democrats have held the Tories back on the economy as everything else.

In the next Parliament, the Tories were already planning huge and deep cuts in public spending to get rid of the deficit before committing an extra £8 billion to the NHS. They are also pledging tax cuts for the rich. No surprise there. What worries me is where there axe is going to fall to pay for this extra commitment. The spending cuts they already had planned were bad enough, to be honest. I mean, removing Housing Benefit from young people, cutting the benefits cap  and capping child benefit at two children was already going to hit the poorest and most vulnerable people pretty hard. Where will they go after that if they remain determined to look after the wealthier members of society by not asking them to pay more?

Liberal Democrat plans for funding the £8 billion for the NHS include maintaining the extra £1.7 billion we secured for this year’s budget and restricting relief on Capital Gains Tax. As an aside, raising Capital Gains Tax should be an option. We secured a rise in the first Coalition Budget back in 2010 but nothing since.

The Tories seem to have fallen apart in this second week by making ridiculous personal attacks on Ed Miliband and trying to scare Middle England with  ever more ridiculous secret deals between Labour and the SNP. That’s one way to keep the focus off their spending plans, but with the manifesto launches this coming week, they are not going to have anywhere to hide.

 

 

 

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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17 Comments

  • I have always been puzzled by the suggestion that Conservatives might ever have had any claim to economic competence.

    In government, the names Heath, Thatcher, Major and Cameron summon up all sorts of memories but economic competence is NOT one of them.

    Nobody should be surprised if over the next three weeks Cameron and his chums, when not kissing lambs or boring school children, promise every electoral bribe in the book.

    It was Enoch Powell who once commented that the Conservatives would not only sell their own grandmother, but they would cook her and eat her as well if they thought it would win them power.

  • Criticism of your coalition partners.

    Is this a first ?

  • Caron Lindsay Caron Lindsay 11th Apr '15 - 2:14pm

    @john tilley I did say claim, I didn’t say credible claim:-).

    @MartinB, I criticise them all the time because they deserve it.

  • They’re trying to appeal to the elderly hoping that the elderly will vote for their own self interests out of selfishness regardless of what that means of younger generations. Fees for the young and triple locked pensions for pensioners, the generation that got free higher education. And now, a guarantee that over 75’s will see a GP within 24 hours, what they’re more important than a sick toddler are they?

    They Tories will make the cuts to pay for their spending commitments. But they’ll just ensure that the young pick up the bill, and under 65s on benefits. They just haven’t told us what those cuts will be yet.

  • Frank Booth 11th Apr '15 - 2:53pm

    The evidence is that the British economy is already slowing down whatever Hunt says about the long term plan. Obviously the Tory press is avoiding talking about it in case it harms their prospects at the GE.

    On the right’s perceived economic competence, I think the left only has itself to blame. Spending too much time bemoaning the Tories as brutes, unfair and in it for the rich might seem like good slogans but too often the Tories have been given a free pass when it comes to general competence. No one doubts the Tories know the price of everything, they just don’t know the ‘value’ of it. The left seems afraid of common sense.

  • I posted this on another thread but it seems more pertinent here….

    “Generous” George Osborne has announced that HE’S found an extra £8Billion down the back of the sofa. Sadly, for them, neither Osborne nor Hunt can agree on which sofa it is)…

    Over the last few days the Tory election campaign seems to have gone from ‘austerity’ to ‘giveaway’ mode without passing through reality….

    I would like to add that I find the BBC’s webpage coverage of this election biased towards the Conservative party….Every ‘main’ article seems to feature a smiling Cameron, Osborne and today Hunt….The headlines are less than sceptical as each new ‘giveaway’ is announced…..Milliband and Clegg seem to remain relegated in the ,second feature’….

  • John Minard 11th Apr '15 - 3:27pm

    This is not the time to experiment with the first Tory government since 1997 – scary thought!!

  • Bill le Breton 11th Apr '15 - 5:05pm

    Giles Wilkes went back to the Bank of England’s May 2010 published fan chart on the future projections for GDP (prior to the June Coalition Budget) https://pbs.twimg.com/media/CCTGywBW0AAqlyn.jpg
    (I just hope that leads to it – holding breathe after hitting post comment)

  • Bill le Breton 11th Apr '15 - 5:11pm

    Right … what I shall never understand is why the Bank’s MPC did not ensure that the June 2010 Budget and the noise surrounding the policy of accelerated fiscal consolidation was not accompanied by a further significant loosening of monetary policy to offset it (as the FED did in the US at the time of the ‘fiscal cliff’ there) and promised by Governor King. AND why those at the Treasury failed to enforce that promise when it did not appear.

    It cost this country at least £100 billion – that is £100 billions pounds of life chances.

  • John Tracey 11th Apr '15 - 6:00pm

    Conservatives? Economic competence? It is all spin. The social damage they would do on their own being dressed up as competence beggars belief. The Darling Plan, to half the deficit in four years, which was branded irresponsible by the Tories, has not even been met by Osborne. If that was part of the “long term economic plan”, why has it been chopped and changed and deadlines missed? (It is because the economic policies must change as the economy does… we don’t do central economic planning in that way). All of this talk about the “long term economic plan” really annoys me… the Tories have come much closer to the Darling plan (that they trashed in 2010) than their own, but when do we hear that? The Tories ‘economic plan’ was wrong in 2010… we should be shouting about how they were wrong then and their “long term plan” not being worth whatever it is written on. It has been spun so much that it’s a joke.

    The Tories on their own really scares me… and I’m in work! To be poor, to be disabled, to be unemployed etc. under the Tories. I feel for these people because they will know, like most know, that the Tories think that they are scum.

  • Philip Thomas 11th Apr '15 - 6:55pm

    I see Cameron has just pledged to freeze rail fares for 5 years. The rail companies require government subsidy to keep afloat already- without fare increases at inflation or above they are going to need more government subsidies. So that’s another unfunded spending pledge!

  • Frank Booth 11th Apr '15 - 7:44pm

    Bill Le Breton – I think King has a good deal to answer for but what about the politics? I’ve never understood the mania for fiscal stringency combined with monetary activism but what mandate does the Bank of England have to enact radical policies? Ultimately it’s an unelected body that sees it’s job, I suspect, to maintain stability. What’s also not talked about enough is how QE has been used. Almost all of it has been used to purchase government bonds. Perhaps the Bank of England is being highly principled but in the US and elsewhere the central banks have been prepared to buy corporate bonds.

    Finally in King’s farewell interview with The FT he stated that the reason he had sided with the coalition on fiscal policy was because he’d spoken to people at the Treasury who’d pointed out how difficult it was to get investment projects going, so he’d thought extra government borrowing was unlikely to go on economically productive uses (and it must be remembered that Labour was, like the coalition, planning big cuts to capital spending). Now he might have been trying to cover his back and looking for excuses but I still find those remarks startling. Frankly I think as a country we need to start asking ourselves some pretty big questions about whether we’re prepared to build the physical infrastructure necessary to enjoy prosperity in the future. Continuing population growth as we’ve seen in recent years will only make the challenge more stark.

  • Eddie Sammon 11th Apr '15 - 8:06pm

    We need to emphasise how increasing the tax free allowance reduces dividend tax too. I’ve just spent 10 minutes trying to come up with everything to convince a Conservative to vote Lib Dem and as soon as I told him raising the tax allowance was a Lib Dem policy he switched. He said his accountant told him it was a Conservative policy. Lol.

    The Conservatives are in panic mode, but the key is that many of their boasts are Lib Dem policies.

  • The £8bn that the NHS England requires means there will still have to be cuts to find the rest of the £20bn of the funding gap. The £8bn figure comes from increasing spending on the NHS by 1.5% above inflation every year.

    Nick Clegg in the leaders’ debate promised to increase the spending on the NHS by £8bn a year by 2020, and I believed the Lib Dem narrative that said it was fully funded. I expected we would have a plan of increasing spending by say £1.6bn a year. However today I received an email from Ryan Coatzee telling me to tell voters that we have found the money but the Tories haven’t.

    In the PS he says we have 1.7bn already in the government’s plans for 2015-16 and £250 million for 2016-17 which we promise to increase by £750 million and this £750 million will be funded by scraping the shares for rights scheme and by restricting unnamed reliefs on Capital Gains Tax. There is nothing extra for 2017-18 and for the years 2018-19 and 2019-20 we will increase spending on the NHS at the same level as the economy grows.

    The OBR forecasts economic grow for 2018 and 2019 are 2.3% and 2.4% and I am not sure that this calculates out as £2.6bn in 2018-19 and £2.7bn in 2019-20 for the NHS.

    However Nick Clegg also said that NHS spending in Scotland and Wales would increase in the same proportion. This increases the £8bn to over £9bn. We have also promised to increase spending on mental heath and this I assume is above the money identified by NHS England.

  • Philip Thomas 11th Apr '15 - 9:18pm

    @Michael BG
    The Mental Health money is included in the £8bn. Which is a problem if NHS England’s plan didn’t include spending more on mental health…
    If growth falters we will have to borrow (fiscal tightening would cut growth still further). But this is a Keynesian maxim- borrow in slumps and run a surplus in booms.

  • Maggie Smith 11th Apr '15 - 9:43pm

    @John Tracey

    “I feel for these people because they will know, like most know, that the Tories think that they are scum.”

    More frightening than being considered scum is being considered an inefficiency and that is where the Tory party are looking to make savings. I really don’t care about my friends being called skivers and lazy, that’s just political rhetoric, but the chilling thing is that they feel like they are just some “process” that can in some way be indirectly trimmed away because be under no illusion, they ARE seen as an inefficiency by the Conservatives. They not only have 12bn to find from savings in welfare but now an addition 8bn to find for this “on the fly” NHS promise.

    People are scared, really scared and this is the 21st century in one of the richest countries on earth.

  • Well I hope Caron is going to apologise to the Tory party, and George Osborne in particular, for not knowing where the money is coming from….
    As he explained on the Andrew Marr programme, he has a ‘cunning’ (sorry ‘balanced’) plan….

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