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The Conservative Manifesto 2024 - An Initial Response

11th June 2024

An assessment of the tax cuts and spending changes proposed in the 2024 Conservative party general election manifesto by Institute for Fiscal Studies.

Paul Johnson, IFS Director, said, "The Conservatives have promised some £17 billion per year of tax cuts, and a big hike in defence spending. That is supposedly funded by reducing the projected welfare bill by £12 billion; cracking down on tax avoidance and evasion; and saving billions from cutting civil service numbers, reducing spending on management consultants, and "quango efficiencies". Those are definite giveaways paid for by uncertain, unspecific and apparently victimless savings. Forgive a degree of scepticism.

Hands up though. I was equally sceptical about promises of delivering £12 billion of welfare savings in the 2015 manifesto. Via some serious cuts, including four years of freezes, those savings were broadly delivered, albeit two years later than that manifesto had claimed. And there is a real challenge this time. Spending on health-related benefits has ballooned - a doubling in the number of new claims for disability benefits each month compared with 2019.

So it is right to identify this as a challenge to address. The trouble is the policies that have been spelt out are not up to the challenge of saving £12 billion a year. Some have already been announced and included in the official fiscal forecasts; others are unlikely to deliver sizeable savings on the timescale that the Conservatives claim. The hope seems to be that, since spending on disability benefits is rising rapidly, one can simply "reform disability benefits" and hold spending down. But halving the number of people that successfully apply for disability benefits from its current level would not be easy and would need definite, clear policies that require difficult decisions. These are not stated.

The biggest tax cut promised is another 2 percentage points off the main rate of National Insurance contributions for employees, coming at a cost of more than £10 billion a year, and worth some £450 a year to someone on average earnings of around £35,000. But note they would also lose £150 from continued freezes to income tax and NICs thresholds. The promise to abolish the main rate of self-employed NICs altogether would doubtless be welcomed by the self-employed but would further entrench the tax advantages of self-employment over employment.

What the manifesto did not tell us was where the £10 to £20 billion of cuts to spending on unprotected public services, as implied by the March Budget, might come from. Indeed the billions of savings from cutting civil service numbers and the rest noted in the manifesto have been earmarked to fund the additional defence spending, and would come on top of those cuts. This manifesto remains silent on the wider problems facing core public services - and if you think those civil servants, management consultants and quangos were delivering anything, these plans imply an even tougher time than set out back in March."

Starmer lays into Sunak - and CorbynResponding to the Tory manifesto more widely, Streeting urged voters to look carefully at an “enormous and desperate attempt to buy people's votes.”

There are a “whole raft of unfunded spending commitments and tax cuts”, he said, adding: This is Liz Truss’ ‘mini Budget’ on steroids.”

Meanwhile Starmer told the BBC the manifesto was “Corbyn-style”, with “none of it costed”.