We knew that their promises could not be fulfilled. Everyone said so. Paul Johnson, of the Institute for Fiscal Studies, said in a choked voice during the election campaign that both parties were engaged in a “conspiracy of silence” on the sustainability of public finances.
When, after a decade at the IFS, he set out to become principal of The Queen’s College, Oxford, with the thanks of a grateful nation echoing in his ears, we can observe his disdain for the subject. What the parties were guilty of was not actually “silence”; Their crime was making vocal promises they couldn’t keep.
Keir Starmer and Rachel Reeves have promised workers there will be no tax rises and have sometimes said in their manifestos that additional tax rises are not needed to fund the plans. A few days after the election, the new prime minister and chancellor announced that they would have to fulfill these promises – although they did not quite put it that way – because the books were in a worse state than they had expected.
This was despite Reeves publicly saying that his method of giving surprises about the true state of finances during the election was something he would not do. “We now have the OBR,” he said Finance Times On June 18. The independent Office for Budget Responsibility regulates public finances impartially so that the government cannot hide bad news. “We know things are in pretty bad shape,” he said. “You don’t have to win the election to know that.”
But we knew he would still raise taxes. Just after the election was called in May, Ipsos asked voters how likely it was that either party would “increase the taxes you pay personally” if they won: 56 per cent thought Labor would increase it; 52 per cent think the Conservatives will do this.
So you could say voters are complicit in this not-so-silent conspiracy. They didn’t believe Labor’s promises but they voted for Labor anyway because it was time for change and they didn’t think Labor could be worse than what they had.
Now it might make sense to complain that Starmer and Reeves aren’t being honest with people. I would even go further and say that it is important to point out that they did not keep their promises. But but but…
It’s worth asking whether voters bear some responsibility in a country where politicians who say they will raise taxes think they won’t get elected, at a time when this is the only sensible and responsible thing to do. Voters want the best quality public services, complain loudly when they don’t get them, but punish politicians who state they should be paid.
So, while it is important to hold politicians accountable for saying one thing before the election and doing another afterward, we must also say that taxes must increase; because the alternative is for public services to fall far below what is acceptable in an economy. civilized nation.
It’s a good thing taxes are rising and “working people” have to pay them because no one else is. As Reeves painfully discovered, when the Treasury proposes higher taxes on the super-rich who move globally through its model, they tend to leave the country and cut rather than increase their incomes.
But the only group that has no right to accuse Labor of breaking its promises is the Conservative Party, whose tax cuts were a trap for Labor in March and whose election tax and spending promises are just as dishonest.
Jeremy Hunt’s unfunded cut to national insurance was wrong and irresponsible, but the symbolism of the tax cut is so strong that Labor had to go along with it; Although both parties and most voters know that this need not be merely reversed, but more drastic steps will be needed to stabilize public finances.
Any Tory attacking the government for imposing taxes should be forced to focus on the substance of the matter. What expenses would they cut instead? If the Conservatives had won the election they would be in Reeves’ current position. They would also accept public sector pay deals because they would have to. Otherwise it would be impossible to recruit and retain doctors, nurses, teachers, police and armed forces.
What expenses would they cut? What tax increases would they implement? They probably didn’t tell us during the election campaign because they didn’t know. I don’t think Reeves knows for sure what kind of taxes he will impose, although he is alert enough not to rule out increases in employers’ national insurance contributions.
All the voters had to go on was a flicker. They knew that Labor was more likely to be in favor of public spending, while the Conservative Party was more likely to be against it. Ipsos polling at the start of the election campaign showed that although most voters thought both parties would raise taxes, 59 per cent thought Labor was “likely” to “increase spending on public services”, while only 32 per cent said Labor would “increase spending on public services”. He revealed that he thought it would “increase public services spending.” Conservatives.
That’s what people knew they were voting for: higher taxes and better public services under Labor, or higher taxes (probably not that high) and worse public services under the Conservative Party. They chose the Labor option and this is what they get when you strip away all the noise around the Budget.