Austerity plans under fire as UK election nears
LONDON, United Kingdom – With just two weeks before a knife-edge election, Britain's major political parties Thursday faced stinging criticism from a top think tank over the lack of detail in their manifesto austerity plans.
The governing Conservatives and their junior coalition partners the Liberal Democrats, as well as the opposition Labour party and the Scottish National Party, have failed to provide detailed fiscal plans for the next five years, the Institute for Fiscal Studies (IFS) said in a report.
"Public finance plans of Conservatives, Labour, Liberal Democrats and SNP leave much unanswered," the respected think tank concluded after analysing the parties' manifestos before the general election on May 7.
"None of these parties has provided anything like full details of their fiscal plans for each year of the coming parliament, leaving the electorate somewhat in the dark as to both the scale and composition of likely spending cuts and tax increases."
The withering criticism came as official data showed the coalition government beat its own deficit-cutting target for the 2014/2015 financial year to March.
Economists said the data gave a boost to Conservative Prime Minister David Cameron – whose election campaign has been based on his handling of the economy.
Public sector net borrowing, the government's preferred measure of the deficit, fell to £87.3 billion ($131 billion, 122 billion euros) in the year to the end of March, or the equivalent of 4.8 percent of gross domestic product (GDP), the Office for National Statistics revealed.
That beat the official forecast of £90.2 billion and marked an improvement from £98.5 billion in 2013/14.
The deficit – the annual shortfall between government revenues and expenditure – has now dropped by about £60 billion since just before the coalition came to power in 2010.
The IFS conceded that there were "big differences" between the main political parties but called for clarity on the tax and spending measures.
"There are genuinely big differences between the main parties' fiscal plans," IFS deputy director Carl Emmerson said.
"The electorate has a real choice, although it can at best see only the broad outlines of that choice."
Conservatives say they would eliminate the deficit by 2017/18 and start to run a surplus, while Labour says it will reduce the deficit each year and balance the books "as soon as possible" during the next five-year term.
In both cases, the country would still be left with a mountain of debt.
The government currently has an overall debt of £1.48 trillion – some £500 billion higher than 2009/10.
"The Conservatives are planning the largest reduction in borrowing over the next parliament, of 5.2 percent of national income... They would require some large spending cuts or tax increases to achieve this," the think tank said.
It added: "Labour has been considerably more vague about how much they would want to borrow. They have pledged to 'get a surplus on the current budget' without specifying either exactly when or how much of a surplus."
While the Conservatives would need to make swingeing cuts to public services, Labour would need to borrow £26 billion per year, the IFS said.
The state of Britain's economy is in sharp focus ahead of the general election, with Labour leader Ed Miliband arguing that the ruling coalition's painful austerity measures have hurt the poor.
However, the centre-right Conservatives and the Lib Dems are hoping to capitalise on their stewardship of the economy, which has staged a solid recovery since 2010.
Separate official data showed that British retail sales unexpectedly slid 0.5 percent in March from the previous month. Analysts had expected a gain in the data seen as a key indicator of the economy's health. – Roland Jackson, AFP/Rappler.com