Alistair Darling: Conservatives Credibility Gap
4 January 2010This is an important year for the country. The choice people will face is between two competing visions for our future.
David Camerons decade of austerity or our vision of building a fair and just society with growth guaranteeing jobs and opportunity for every business and family.
It is a contrast between a pessimistic outlook, lacking ambition, and one of confidence and optimism.
This week we will be talking more about our plans for growth.
Just as importantly, I will also be presenting legislation to the Commons tomorrow which will demonstrate our determination to live within our means and set out how we'll halve the deficit over four years.
The challenge for us is to support the economy, securing the recovery while bringing down borrowing.
The election presents the country with a choice
The credibility of the promises of the the political parties will be important.
And thats what I want to talk about today.
Over the last couple of years, David Cameron has gone round the country telling people whatever he thinks they want to hear.
Every audience gets told whatever they want
You want tax cuts, here they are
You want a faster cut in the deficit, well do that too
You want more spending, here it is. Lots of it.
You want to reverse what Labours doing, we can do that too.
No one is keeping tabs of all their promises certainly not George Osborne
Until today. For the first time, we have brought all the Tory promises together and I can tell you the bill for all this.
The Tories have made over £45bn of pledges, but can barely explain how they can pay for a quarter of this.
This leaves them with a credibility gap of £34bn.
Today we are publishing a factual account of the cost of a Conservative promises.
This is a very detailed document, as you will see. Every promise is backed-up by quotes from the Conservative party.
These are not long forgotten promises from another time. All have been confirmed in the last two years. Most have been repeated in the last few months. And theres more spending pledged today.
For costing the policies, we have given the Tories the benefit of the doubt and used their estimates except where there are clearly more recent or more credible numbers available.
The costings are based on publicly available sources such as Parliamentary Questions or the Pre-Budget Report.
In some cases, later costings credit the Tories with additional revenues or savings. In others costings suggest the Tories have over-estimated revenues or under-estimated costs, leaving them with a substantial credibility gap.
This document seeks to reflect the minimum cost of the Tory promises.
What is clear is that the Conservatives have so far only set out how they would raise a fraction of the money needed to pay for their plans to introduce new tax cuts, reverse current tax changes, and fulfil their spending commitments.
Just to meet those promises, let alone to cut the deficit faster, they would need new tax rises and deeper cuts to government spending elsewhere.
The document sets out the plans in full.
They have made tax promises worth £21bn per year by the end of the Parliament, including:
- £4.1bn for removing basic rate income tax from savings
- £4.9bn for married couples allowances, where the highest earners get the most benefit
- £1.5bn for Inheritance tax cuts focused on 3000 estates.
These include measures to reduce the deficit, such as the national insurance rise, the new 50p top rate and restrictions on pension tax relief for the very highest earners.
They have also made over £11.1 billion of spending commitments. Such as 45,000 extra rooms for the NHS, 5000 more prison places and 3 more infantry battalions. And this doesnt include many potentially expensive promises like tax credits for grandparents or a National Citizens Service which are just too vague to cost.
We have included Tory figures for efficiencies and cuts where they are credible and genuinely additional to anything the government is already doing. Even in the most generous scenario for the Conservatives, all these pledges would yield annual savings of £6.6 billion.
And finally, their tax rises - on increasing the cost of business investment and putting a levy on non-doms from day one, for example - yield them a further £5.1 bn.
Taken all together this leaves a credibility gap of £34bn in their plans.
And all this is in addition to the Pre Budget Report proposals. Thats the baseline. They would need to find this extra £34bn to fund their promises.
It could only be found by extra taxes or cuts in spending.
However, in addition, if they want to cut the deficit further and faster than us as they often claim, they need to explain both this £34bn and their additional cuts to do that.
To halve the deficit even just one year faster than Labour that would mean identifying a further £26bn of cuts in spending or rises in taxes.
Over the last few years, hardly a week has gone by without them making a promise on tax of spending. Now they have to identify how theyll pay for them.
Until they explain how theyll plug this £34bn gap in their list of promises, they cant credibly say anything about what theyll do on the deficit.
You cant fight an election on a nod and a wink; sometimes claiming you are committed to these promises, and when challenged claiming you are not.
These are all Tory promises, made by David Cameron. You can see when and where they were made.
It now for them to say:
- When and how theyll be paid for
- Or that they withdraw them