Normally a political announcement attracts criticism and praise along broadly predictable lines. Such reaction normally tends to be pretty binary – there are supporters and opponents, lined up pretty much as you’d expect.
It’s a lot more unusual to see a division between critics of a proposal, attacking it for conflicting reasons. But that’s what’s happened in response to the Conservative manifesto, or at least its approach to spending and taxation.
Obviously the main emotion among Tory strategists may well be mild, tentative, relief at how it has landed. But it’s still notable that it has been criticised for a reckless approach to fiscal responsibility and for playing it too safe fiscally.
Here’s the Institute of Economic Affairs:
“[The] manifesto raises a series of questions about the party’s commitment to fiscal responsibility, and whether the Conservatives can still meaningfully brand themselves the party of taxpayers.”
And here’s the Institute for Fiscal Studies:
“If a single Budget had contained all these tax and spending proposals we would have been calling it modest. As a blueprint for five years in government the lack of significant policy action is remarkable.”
So it’s supposedly a manifesto which is simultaneously so drastic in its excesses that it endangers the Conservative’s reputation for fiscal responsibility, and one so unambitious and sparing that it wouldn’t pass muster as a one-year budget.
So which is it?
In cash terms, the manifesto promises to spend £2.9 billion a year extra by 2023-24, over what was planned pre-election. That certainly is modest – and therefore rather good news for taxpayers, contra the IEA – but not perhaps as modest as it initially seems.
Don’t forget that before the election was called there were a raft of spending promises – on police, hospitals and schools – that the Party has decided not to include in this manifesto. Next year alone that extra spending tops £11 billion, and there are ongoing commitments to more expenditure (eg on hospital construction) that will run on through the next Parliament.
Why haven’t those gone into the manifesto? There are a number of conceivable reasons.
Perhaps they believe they’d already banked them politically, and wanted to ensure the manifesto could be communicated as something new.
Charitably, maybe they didn’t want to be accused of reheating old pledges, re-spending money they’d already committed to spend.
Presentationally, it’s possible they wanted to have a manifesto so unimpeachably responsible in its limitations that it drew a screamingly obvious comparison to Labour’s predictable spending splurge. Like this:
By my reckoning, for every pound the Conservatives are pledging to spend on the current budget by 2023/24, Labour will spend over £28. For every pound. Astonishing. difference between the two major parties. Can’t remember anything like it.
— Ed Conway (@EdConwaySky) November 24, 2019
Or maybe they wanted all three: the news shot, the avoidance of the re-heating critique, and the stark contrast with the Opposition.
It certainly seems to have turned out that way – Boris Johnson is able to talk on TV about those pre-election pledges for higher spending on public services, and also to wield his slimline manifesto in the most dramatic terms of contrast to Jeremy Corbyn’s plans. Restraint can be a messaging tactic, just like spending, and they seem to want to use both.
There’s obviously a heavy consideration about the presentational politics of the manifesto. That should always be so – the one time in recent years when that was neglected, in 2017 on social care, it became an election-defining error. Like so many other moments so far, the very political influence of the architects of the Conservatives’ agenda are detectable.
That isn’t the only side to the story. Yes, those setting the Tory policy agenda are campaigners, rightly interested in opening effective and undeniable gaps between themselves and Labour. Yes, a gap on spending – and therefore tax, borrowing and fiscal credibility – is part of that, and is being effectively deployed to throw doubt on Labour’s plans.
But by policy inclination, they’re more relaxed about spending than some of their predecessors. They are willing to commit to spend more (the effect of the Vote Leave bus has been bigger since the referendum than during), and they are very close students of what many 2019 target voters actually prioritise, which includes spending on specific services. That’s one reason why there’s been a lot of commentary about the way the Johnson era has effectively ditched the previously pretty sacrosanct language of fiscal restraint – which helps to explain why the IEA is so concerned.
Corbyn has made that inclination easier to indulge. He has redefined what can be viewed as a ‘normal’ spending pledge – throwing tens of billions around apparently on a whim – and thereby drastically lowered the risk for Conservatives to be accused of irresponsibility. Mark Littlewood of the IEA is uncomfortable about Tory plans, but as even he puts it: “There’s fiscal relaxation… and then there’s fiscal incontinence.” As I noted at the time of the Corporation Tax freeze announcement, if you’re a fiscal conservative, where is there for you to go?
Therefore, shouldn’t the question be why this particular brand of Conservative aren’t using the political conditions as an opportunity to splash more cash than they already are? Yes, there has been a fiscal relaxation, and a shift in economic philosophy away from the restraint which many of us hold to be a fundamental tenet of conservatism. But really you might have expected them to go even further with it, all things considered.
The answer appears to be Sajid Javid. His power is limited by the Hammond Hangover (nobody wants to be the new Government’s Philip Hammond, sabotaging the agenda then ending up in exile), by the fact that he is not a natural buccaneering troublemaker, and by the blunt political reality that BoJo, not The Saj, won the leadership race and therefore controls the strategy. But that doesn’t mean the Chancellor is completely subservient, as is sometimes made out: he retains a strong approval rating, and he’s still in charge of the Treasury, which remains a powerful machine despite the diminishment of its reputation in recent years.
In short, the traditional role of his office is still to count the pennies, defend responsibility, and set some limits. There are political advantages in limiting spending commitments, but if the leadership completely had its way in all spending discussions I suspect we’d see more money being promised than there has been so far. That might be of limited comfort to fiscal conservatives, but it’s better than nothing – and miles better than the alternative across the political aisle.