The economic policies proposed by the main parties contesting the U.K. general election do not seem too different across the political spectrum at first look.
But a closer analysis reveals deep divisions, with some policies being labelled “idiosyncratic” by at least one economist – to use a polite term.
“Economic madness” is the less politic one employed by several commentators from different sides of the U.K. politic spectrum.
All parties agree on one thing: The economy is the key issue in the May 7 election.
It has given rise to such an avalanche of conflicting proposals and statistics that the International Monetary Fund forecast on April 15 the U.K. will still be running a budget deficit in 2020 equivalent to 0.3 percent of national income, as the organization expects weaker growth, lower tax revenue and higher spending than the parties are predicting.
All the parties have made reducing the budget deficit their headline item and there are strong similarities between Labour’s proposals and those of the coalition partners.
Reducing the deficit means making cuts, although each party ring-fences certain budgets – for Labour, it is health, education, tax credits and foreign aid, although the foreign aid budget is tiny, at around 1.4 percent of government expenditure.
The Conservatives are only promising to withhold cuts from basic education, are less clear about their plans for the National Health Service and are prepared to cut tax credits.
The SNP billboards plans for budget reduction but, at the same time, is promising to invest £140 billion ($212.9 billion) across the U.K. in public services.
The Liberals say they will get rid of the deficit by raising taxes by an additional £12 billion ($18.2 billion), cutting public spending by £12 billion ($18.2 billion) and cutting welfare by £3 billion ($4.6 billion).
For economist Jonathan Perraton, who lectures at the University of Sheffield, all of these proposals appear somewhat idiosyncratic as all of the proposals involve cuts.
“… the cuts would have to fall on those departmental budgets that have already borne the brunt … under the coalition. There is an explicit commitment to cap the welfare budget,” he pointed out in a note published on April 14.