The UK’s main political parties have “ducked” addressing stark choices over public finances in their manifestos and it will be a “considerable surprise” if taxes are not increased over the next five years, a leading think tank has warned.
According to BBC News, the Institute for Fiscal Studies (IFS) accused Labour and the Conservatives of engaging in a “conspiracy of silence” and ignoring “painful choices”. It said the UK has the highest debt level for more than 60 years, taxes are near a record high and spending has swelled – but public services are “visibly struggling”.
Painful Choices
While the government is paying huge interest on debts and welfare bills have grown, spending on health is likely to rise because of an ageing population while defence funding will have to increase. Meanwhile, economic growth is subdued.
Paul Johnson, director of the IFS, said: “These raw facts are largely ignored by the two main parties in their manifestos.”
He said that “huge decisions over the size and shape of the state will need to be taken, that those decisions will, in all likelihood, mean either higher taxes or worse public services”.
Whoever wins the election in less than a fortnight faces a “trilemma”, said the IFS.
“Raise taxes by more than they have told us in their manifesto. Or implement cuts to some areas of spending. Or borrow more and be content for debt to rise for longer,” it said. “What will they choose? The manifestos have left us guessing.”
Mr Johnson also criticised both Labour and the Conservative Party for ruling out increases to income tax, National Insurance and VAT. “Despite a damaging rush to rule out increases in all sorts of tax rates, it will be a considerable surprise if no other taxes are increased over the next five years,” he said.
In response to the IFS analysis, Prime Minister Rishi Sunak said: “We have a fully costed manifesto which can deliver tax cuts for people at every stage in their lives. That is largely funded by making sure that we can find some savings in the growth of the welfare budget because it has been growing at unsustainable levels since the pandemic.”
Labour leader Sir Keir Starmer said: “The economy has flatlined for 14 years and that is exactly what we are wanting to change and that’s why we have set out plans for growth in our manifesto.”
The Lib Dems insisted the plan set out in its manifesto was “fully costed”. A spokesperson said it would allow the party “to invest in our public services and rescue our NHS, funded by asking big banks and billionaires to pay their fair share”.