LONDON (Reuters Breakingviews) - After decades of tussling over the middle ground, Britain’s two main political parties have drastically diverged. Prime Minister Boris Johnson’s manifesto for the Dec. 12 election is short of new policies and long on pledges to deliver Brexit speedily. His nearest rival, Labour party leader Jeremy Corbyn, is offering the opposite with a laundry list of spending plans. Each ignores reality in his own way.
The manifesto that Johnson unveiled on Sunday commits to not hiking either income tax, national insurance or VAT but is otherwise lacking in big visions. Instead, it stresses his determination to take Britain out of the European Union. But that won’t end the UK’s three-year torture over Brexit once and for all. There will be yet more wrangling over the future relationship with the country’s main trading bloc – a process that The UK in a Changing Europe, a think tank, reckons could reduce GDP by 2.5% in a decade’s time.
Corbyn’s tax and spend plans look similarly quixotic. By 2024, he is committing to 83 billion pounds of spending hikes relative to existing forecasts, around 10% of current expenditure. The Conservative equivalent is less than 3 billion pounds. Johnson’s infrastructure investment plans imply 20 billion pounds of annual borrowing; Labour’s assume 55 billion pounds a year. From a current base of 38% of GDP, the Conservatives would hike spending to 41% and Labour over 45%, the Resolution Foundation estimates.
True, Corbyn’s manifesto contains some good ideas, like reducing the disparity between taxes on income and capital gains, building social housing, and taking climate change seriously. But other pledges, like scrapping student tuition fees, are overkill. And a new promise on Sunday could see its annual spending hike to 95 billion pounds. Labour wants to pay for some of that by hiking corporation tax back to 26%. Because of cuts to capital allowances, the UK would have the most taxed corporate sector of any G7 major industrial country, according to the Institute for Fiscal Studies.
Voters may feel that a big Conservative majority would allow Johnson to negotiate a damage-limiting EU trade deal. That could make his offering more palatable than Labour’s unfocused approach to spending. But both manifestos are flawed and avoid tangling too much with reality.
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