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General Election 2019: Spending Free-for-all Policies Comes At A Price

7th November 2019

In 2010 Labour and the Conservatives were offering austerity. In 2015 the offer of another serious dose of public spending cuts won the day. By 2017 while the Conservatives offered yet more austerity in a quest to reach budget surplus, Labour were offering very big increases in taxes, spending and borrowing.

Come 2019 and things have moved on. You'd struggle to reconcile the actions of the Conservative Party that is now in government with the one that put its 2017 manifesto before the people. Any idea of budget surplus has been well and truly ditched.

This autumn's spending announcements imply day-to-day spending on public services reaching levels closer to those promised by Labour in 2017 than those promised by Theresa May. That is to be financed by more borrowing, not more tax.

Labour will outbid their rivals on spending, and probably claim to raise more tax too. They will probably come back with promises of free higher education, childcare, social care, and prescriptions for all, and much more besides, alongside a huge increase in spending on infrastructure.

With interest rates seemingly stuck at historically low levels, borrowing is cheap. Maybe this is a time to prioritise spending in general, and investment spending in particular, over deficit reduction. That's certainly the new fashion. And it’s not daft. But the free lunch that we will no doubt be promised is not there.

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