GE 2017: Strange Manifestos for Strange Times
By Alex Davies - Research Analyst
When Theresa May called a surprise General Election, the decision seemed to be a sound one, at least from her own parties’ point of view. What has followed however, has been one of the most simultaneously fascinating and despair-inducing campaign periods in recent history, and certainly in my lifetime. The political spectrum, often described as a line or a circle – where far left and far right crossover, now feels more like an ever-shifting 4 dimensional chess board. The manifestos themselves represent three parties wrestling not only with their own ideological justifications for being, but also the massive disruptive effect of Brexit. When the election was called, the consensus was that the Tories would swipe a massive majority, that Labour would suffer enough to see them almost reborn, and the Lib Dems and UKIP would basically fade away. Since the manifestos have been launched however, things seem to have changed.
The Conservatives’ manifesto reads like an unfinished draft of a party having an existential crisis. It has been said for a while that Labour’s return to the left would allow for the Tories to surge leftwards and take control of the centre ground. I have said for a while that the risk of a party spreading itself thinly across the centre is that they end up proposing policies that don’t really appeal to their own ideological base, but don’t really appeal to anyone else either. Early on there is an attempt to redefine what Conservatism is all about – what some are referring to as “Mayism”. It is as much a rejection of free-market capitalism a la Thatcher as it is the pseudo-socialism of Corbyn: a manifestation of the centre-grab and likely alarming to supporters of either.
Whilst the intention here is to sound pragmatic, the results are a bunch of policies that line up in no discernible place politically. We have the social care reform, acting essentially as an inheritance tax that “strong and stable” May flip-flopped on so easily. There is the Miliband-esque commitment to interfere in energy markets, which is a bad idea whoever proposes it, but is an especially un-conservative one. There is tinkering into corporate governance, calls for companies to publish gender-pay gap differentials, a commitment to regulate the internet and the return of fox-hunting which is opposed by 84% of the public– all concerning to liberal-minded Conservatives. Some of the fiscal side of things is more traditional –reductions in taxes, increases in the personal allowance, ending of the pensions triple-lock, but then we have the utterly bonkers re-affirmation of the totally impossible sub-10,000 net immigration target. The Tories’ Brexit plan is well known and includes the “no deal is better than a bad deal” line that is so evidently untrue, but seen by some as a necessary bluff. Finally, there is the total lack of costings – a gamble from the party that they are trusted on numbers where others are not, but an enormous set of goalposts for their opponents. The manifesto harks back to Churchill’s line that “manifestos should be a shop window, not a shopping list”, offering little detail and only broad objectives, but the current feeling is that this approach may have hurt their campaign.
Labour have been smart given the circumstances. Their Brexit policy has long been a mess, but has been firmed up for the manifesto. It is essentially to do exactly what the Tories will do, but for more moral reasons that don’t exactly hold up to scrutiny (We won’t be able to duck state aid rules, for example). Labour do however reject “no deal is better than a bad deal”, which is a clever move, but for some will call into question their ability to negotiate effectively. They have also moved away from any intention to retain single market membership, which would more adequately suit their main objectives, but by committing to take stricter control of immigration (whilst rejecting “bogus targets”) they have finally concluded that membership is unfeasible. By broadly aligning themselves with the consensus on immigration and where Brexit is headed, they have pulled focus away from their haphazard Brexit stance towards everything else in their manifesto, and everything else in their manifesto looks to absolutely appeal to the typical Labour voter, and potentially many others given their opposition.
There are tax rises for the rich, a VAT freeze, an “excessive pay levy”, corporation tax rises and a tax on derivatives dealings, a new package to increase provision of free childcare, an end to the freeze on welfare benefits, the abolition of tuition fees and reintroduction of maintenance grants, social care reform at a cost of £7.7bn, repealing of the bedroom tax and a roll out free school lunches for pupils at a cost of £6.3bn. Then there are the promises of nationalisation that caused a bit of controversy by not being included in the costings, which Labour defended by stating that the money would come through capital borrowing and would not affect balance sheets.
There are issues. The practicalities of actually carrying out their renationalisation policy are likely to be more difficult than people expect, and the policy bets on the idea that nationalised industries automatically become more effective than privatised ones, which is evidently not always the case. Labour are thin on exactly what changes to current systems would take place following the buy-outs to make the whole thing worthwhile. The Tories have been criticised for not including costings whilst Labour have, but Labour’s costings are ambitious to say the least, including absolutely no sign of the behavioural effects that the policies will have. All evidence we have suggests that tax changes of this kind struggle to raise any of the extra cash that they propose to, and Labour is particularly ambitious with the outcome of their anti-avoidance measures, which again usually fail to do anything like what is expected. When Labour’s total extra revenue raised and total extra spending both handily add up to exactly £48.6bn, their ability to deliver on their promises may be called into question. Labour’s stance on boosting employee rights is also problematic. It presents all workers as victims of evil corporations when many businesses treat their staff well, and may be seen as tarring all companies with the same brush.
Finally, we have the Liberal Democrats, who much like the Conservatives are gambling on their bold Brexit stance. The Lib Dems are now the only major party to fully support continued membership of the single market following Brexit. They also position themselves as the only party to give the people a say over Britain’s future and the chance to oppose a hard Brexit by promising a referendum on the final Brexit deal with an option to remain. Whilst their position on the single market is laudable in a way, the LDs offer little in the way of confidence that what they propose is possible, particularly the idea that they can promise an option to remain in a second referendum. The LDs are going hard for the 48%, but evidence suggests that their plan may not be working, with support for Brexit to go ahead now supposedly at around 68%.
For the most part, the LDs do a good job of straddling the policies of their opponents, proposing £14bn of new spending pledges compared to Labour’s £48bn. Their policies include a 1p rise to all income tax band rates, raising £6bn to be ring-fenced for the NHS and social care services, a £100bn infrastructure package, a £5.7bn package for schools, a lifting of the 1% public sector pay cap and a reversal of some welfare cuts including the bedroom tax and universal credit. The LDs have also gone hard for the young vote, promising a new “rent to own” scheme and deposit loans for first time buyers, as well as a discounted young person’s bus pass.
The LD’s boldest policy is their plan to legalise and regulate cannabis, something which has been on their agenda for a long time, but may prove divisive amongst supporters. The policy is of course in the footsteps of other similar and successful policies in eight US states, and the LDs predict the policy will be able to rid the streets of high-potency “skunk” and raise £1bn in revenues. They also plan to repeal the Psychoactive Substances Bill, which has been widely criticised for driving previously regulated and legal substances such as “Spice” into the black-market.
In summary, we have our two main political parties offering what could be described as false choices. The Conservatives are counting on Brexit winning them the election, but by trying to claim the centre from Labour have managed to offer up a set of policies that have no ideological coherence and may struggle to find a strong bed of support. Labour on the other hand, return to their comfort zone and offer the policies that their supporters will want, but contrast it with a muddled Brexit policy that may ultimately undermine their own objectives. The Liberal Democrats offer a medium ground and gun hard for those who would prefer us not to Brexit or those that believe a hard Brexit is a means not worth the ends. Ultimately though, the manifestos are thin on economic reasoning, and will do little to reassure people that the parties have a plan for tackling some of our long-term challenges like productivity, skills, infrastructure and re-balancing the economy. This is an odd and unexpected election with new dimensions to those we have seen before, and the manifestos certainly reflect this.
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