SNP spending plans imply same cuts as Labour, says IFS

The Scottish National party's spending plans imply the same cuts, if not more, than Labour's plans over the next five years, the Institute for Fiscal Studies said on Thursday, highlighting a "considerable disconnect" between the nationalists' rhetoric on austerity and their policies.

After analysing the manifestos of the four parties likely to win considerable seats in next month's UK general election, the independent think-tank also found that the Conservatives aimed for the lowest public borrowing and debt levels. But it said the party's policies to achieve these ambitions were still largely unexplained.

On the day that official figures showed the deficit to be £87bn in 2015-16, a touch under the Budget forecast of £90bn, the IFS complained that all the main political parties were asking voters to take their plans on trust. It said it had to make many assumptions about the parties' real intentions in order to crunch the numbers.

"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".

Most significant was the similarity, not difference, between Labour's plans and those of the Scottish nationalists. The SNP has centred its campaign north of the border on ending what it sees as Tory and Labour austerity. "We reject the current trajectory of spending, proposed by the UK government and the limited alternative proposed by the Labour party," its manifesto says.

But when the IFS crunched the SNP's commitment to increase total real public spending by the equivalent of 0.5 per cent of departmental spending in each year, it found the spending profiles to be similar to those implied by Labour's pledge to balance the current budget by 2018-19.

"While [the SNP's] plans imply a slower pace of austerity than those of the other three parties, they imply a longer period of austerity," the IFS said.

"There is a considerable disconnect between this [SNP] rhetoric and their stated plans for total spending, which imply a lower level of spending by 2019-20 than Labour's plans," the IFS added.

The IFS arrived at this result by taking at face value Labour's plans to raise significant sums from attacking tax avoidance and other tax rises, while the SNP has not made specific pledges to raise the net level of taxation. Since the parties have the same long-term borrowing ambition, the SNP's overall spending plans have to be tougher.

John Swinney, SNP finance secretary, said the IFS analysis was "ridiculous".

"While the IFS praise the SNP on one hand for not making up figures on tax avoidance, they have allowed Labour and the Tories to get away with basing their plans on what it admits are 'unspecified' and 'largely made-up assumptions'."

The IFS, which is seen as the most respected and independent arbiter of the political parties' plans, added that there were "genuinely big differences between the main parties". The Conservatives offered a balanced budget and significantly lower debt while the other three parties offered less austerity at the cost of higher public debt, it said.

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However, the Conservative plans to eliminate the deficit implied at least £10bn a year of unspecified cuts to child benefit, tax credits, housing benefit, disability benefits or other working age benefits out of a total budget of about £100bn, he said.

Even if these cuts were achieved, the Tories would have to cut unprotected departments' budgets by another 18 per cent in real terms, about the same amount as over the past four years. These cuts are also unspecified by the Conservatives.

Assuming Labour matches the Tories' NHS spending pledges, the equivalent Labour and the SNP non-protected departmental spending cuts would be about 6 per cent over the next four years.

Chancellor George Osborne has said the electorate should take his party on trust that he can deliver those savings.

On the margins of the International Monetary Fund spring meetings last week, he said: "If you just take this financial year . . . starting at the beginning of this month, you have further reductions in expenditure and, indeed welfare savings, at the same time we've put £2bn extra into the health service and we've delivered an increase in the tax-free personal allowance".

Ed Balls insisted on Thursday that Labour had no intention of doing any sort of deal with the SNP after the election - regardless of whether the respective party's economic policies appeared more aligned.

"On no planet will there be a deal between Labour and the SNP on a Budget that Ed Miliband introduces or I introduce. We are not going to do a deal with a party that wants to break up the UK."

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