Thinktank challenges Conservatives to explain where cuts would come from and insists SNP is not anti-austerity

The Conservatives have been challenged to explain how they will achieve £30bn in fresh cuts to Whitehall spending and a £10bn reduction in Britain’s welfare bill if they are returned to power in May, as the Institute for Fiscal Studies said the gap between the two main parties’ tax and spending plans was the widest at any general election since 1992.

The independent tax thinktank said the electorate had been left “somewhat in the dark” about the details of all the parties’ spending plans but the Conservatives have more explaining to do, because they are aiming at much more ambitious cuts in public borrowing.

The IFS also sparked a row in the Scottish parliament by dismantling the Scottish National party’s claim to be against austerity.

It argued that the SNP’s spending plans are “essentially the same” as Labour’s until 2018-19, but the SNP would continue to cut spending for a further year, leaving it spending less than Labour by the end of the parliament.

“While their plans imply a slower pace of austerity than those of the other three parties, they imply a longer period of austerity,” the thinktank said.

George Osborne has promised to cut £12bn a year from social security spending, but the IFS said the detailed measures he has set out so far, including a two-year freeze on working-age benefits, would save just £1.3bn.

Paul Johnson, the IFS’s director, said paring back the welfare budget by another £10bn-plus would require doing “something quite radical” to the benefits system.

David Gauke, the Conservative financial secretary to the Treasury, later refused to rule out further changes to child benefit, which Osborne has already removed from higher earners. When pressed on the BBC news channel, he said: “I’m not going to get into discussing the specific proposals that are out there.”

The IFS’s analysis of all the major parties’ manifestos, published on Thursday, showed that even if the Conservatives succeeded in saving another £10bn from welfare and raising £5bn from a crackdown on tax avoidance, as Osborne has promised, they would still need to slash an extra £30bn from Whitehall departments over the next five years.

Once a Conservative government had set aside an extra £8bn a year for the NHS, and protected education and aid spending, the IFS said this £30bn of new, unspecified cuts would result in a further 18% real-terms reduction in the budgets of other departments over the next parliament.

“Despite planning for more austerity, the Conservatives’ detailed tax policies amount to a net giveaway, their detailed social security measures would only provide a 10th of the cuts that they have said they would deliver, and their commitments on aid, the NHS and schools would increase spending in these areas,” the IFS said.

The shadow chancellor, Ed Balls, went further, claiming the Conservatives would be unable to meet their pledge to protect NHS funding. “The truth the Tories won’t admit is their plans are so extreme they would end up cutting the NHS,” he said. “Countries which have cut spending on this scale have cut their health service by an average of 1% of GDP – the equivalent of £7bn.”

By contrast, the IFS said Labour’s less aggressive deficit-cutting targets would require “a mere £1bn” in further spending cuts over the next parliament, if Balls could achieve his aim of raising an extra £7.5bn through measures to tackle tax avoidance.

But the IFS cautioned that Labour had been “considerably more vague about how much they would want to borrow”. In total, Labour could borrow up to £90bn more than the Conservatives over the next five years and still meet its fiscal targets, the IFS calculates.

The Conservatives seized on this £90bn figure, with David Cameron tweeting that the IFS’s report was “a damning indictment on Labour’s borrowing plans”.

Frances O’Grady, the general secretary of the TUC, said the IFS’s analysis showed that the scale of the cuts planned by Cameron after the election would put public services at risk.

“The extreme cuts the Conservatives want after the election will kill off the recovery, put wages back in decline and leave our schools, hospitals and other services without the vital revenues they need.”

Carl Emmerson, the deputy director of the IFS, criticised all the main parties for providing too little detail about their proposals, but said: “There are genuinely big differences between the main parties’ fiscal plans. The electorate has a real choice, although it can at best see only the broad outlines of that choice.”



The SNP faced particularly withering criticism, with Gemma Tetlow, one of the report’s authors, suggesting that the path of public spending under SNP plans “seems to be significantly at odds” with the party’s anti-austerity rhetoric.

According to the IFS’s analysis, the SNP’s promise to increase total public spending by 0.5% in real terms each year would mask average cuts of 4.3% to other departments, as it protects the NHS and overseas aid, and boosts spending on the welfare system.

Nicola Sturgeon, the SNP leader, who has styled her party as taking a radically different position from Labour on deficit reduction, rejected the IFS’s analysis during angry exchanges in the Scottish parliament.



Scottish Labour’s deputy leader, Kezia Dugdale, said the SNP’s claim to want to end austerity was no longer credible. The first minister insisted that the IFS’s report was “full of assumptions and speculations”.



She said the SNP wanted to borrow 1.6% of GDP in 2019-20, and accused the IFS of wrongly assuming it was 1.4% in that year. But the IFS rejected her complaint, insisting that a 1.4% borrowing figure was the direct extrapolation from the SNP’s stated plans for total spending and the effects of their tax measures.

Tetlow said: “The only assumption we made was that they increased spending in the way they said they would.”