I am at the Institute for Fiscal Studies launch of their election analysis. It is a pretty dismal affair; not because the work is bad, but because all three main parties’ plans are woeful compared with the necessary repair job for the public finances and the tax system.
The differences between the parties on the public finances is small, IFS says and, as the FT demonstrated yesterday, all parties’ “public spending plans are particularly vague”. The big row over the speed of fiscal tightening makes “a relatively modest difference to the long term outlook for government borrowing and debt”.
All parties will need to raise tax further, IFS says, and the public spending cuts will be worse than under Mrs Thatcher.
Comparing the parties’ tax plans, the IFS has, rather disappointingly, not provided a simple comparison table, but it is clear that the Conservative tax plans are less progressive than those of Labour, and the Liberal Democrats are more progressive. This is mostly a matter of taste for redistribution than economic efficiency, IFS says.
Finally, the IFS says all three parties will make the tax system more complicated, though the IFS clearly likes the Liberal Democrat tax plans the best, calling their plans “far-reaching” and praising the reduction in distortions.