Stephanie Flanders: there’s nothing new in it.  Everything carefully costed, trying to reinforce the message that they are the safe pair of hands.

The IFS has a note but it mostly reflects on the past 13 years (better public services, worse efficiency, some of that probably unavoidable, the future difficult) in a way that is fairly obvious. They also have a fairly robust attack on Lib Dem Tax Claims that ‘the poor pay the most’.  I think this point of theirs is worth making:

The first key point to note is that benefits and tax credits account for £6,453 of the £11,105 average gross income of the poorest fifth of households. Their original income – in other words, private income from sources such as earnings, private pensions and investments, but not that from benefits and tax credits – was an average of £4,651. So the poorest fifth of households were clearly net beneficiaries from the tax and benefit system, to the tune of £2,151 a year, on average.

Ryan Avent of the Economist wonders how all the promises will be paid for.  Jeremy Warner also asks where the money will come from, adding “What, no money for it? What about that nice Mervyn King at the Bank of England, ready and willing with the printing presses?”  If things get really bad, why not ….

But Bagehot argues that “this manifesto doesn’t strike me as the work of a party that has given up the ghost.”

Ben Chu summarises it beautifully in a way that chimes with mine: “we pledge to micromanage your lives” and gives some splendid examples.

Jonathan Freedland doubts that it is a game changer, but highlights some Blairite moves:

Blairite measures include a return to the asbo agenda, with promises of injunctions for harassed neighbours, and a bid to make every hospital a “Foundation hospital” even though that was precisely the Blairite notion that once so incensed Chancellor Brown. Some will like the idea of successful schools or police forces taking over failing ones

But the public voted for Blair, not Blairism, whatever they thought that was.  Polly, of course, does not think that Blairism is there at all.  Her column is the biggest cheer for this manifesto.  Is everyone reading the same document? Yes – for her, this is a compliment:

“Turn to the back of the document and there are 50 mostly decent things that Labour would do and the Conservatives would not. Dig deeper for details, and there are rich pickings for social democrats”

But for many people those are 50 interfering busybody things that they suspect the government can’t afford.  Freedland is right: no game changer.  Not even if they did 100 mostly decent things …

(update on another issue I can’t be bothered to put in a new post: Krugman has proper doubts about any policy that calls for banks to be allowed to fail.  Like with TonyJackson – see earlier post – a cleaning out of shareholders is more popular)


4 thoughts on “Further manifesto reactions

  1. They also have a fairly robust attack on Lib Dem Tax Claims that ‘the poor pay the most’.

    This is the ‘Dillow fallacy’ I noted a month or so ago. If the government renamed some of its benefits ‘tax credits’ it would perhaps make it presentationally better in that the poor would pay much less tax, although nothing else would really change.

    The slight defence for the Lib Dems I guess is a) does it make sense to receive benefits and pay tax? (not obvious that it doesn’t, after all this is what would happen in a CBI, and everyone loves those), or b) voters tend to think the poor get lots of benefits, but perhaps they don’t realise how much tax they pay as well.

  2. “They also have a fairly robust attack on Lib Dem Tax Claims that ‘the poor pay the most’.”

    But the poorest do pay the most *in tax*. If you set out with the explicit aim of making the tax system fairer, that is what your policy is hopefully designed to achieve. The IFS report seems to simply decide it’s going to set a different goal for the policy, without giving a reason which fits with the internal logic of the policy or its presentation. This decision comes halfway down the analysis:

    “The combined impact of the tax and benefit system on the distribution of income seems much more enlightening than the impact of the tax system alone when talking about fairness.”

    Eh? But the policy is specifically about a fairer tax system. There is a fair enough argument to be had over whether reforming the tax system is a higher priority than, for example, topping up benefits. But you can’t decide that the former goal fails because it isn’t the latter goal.

    This train of thought stems, I think, from a certain received wisdom in the progressive camp that all policies should *only* benefit the poorest (and usually only the bottom quintile will do) and *only* in reverse order of poverty. Which belief leads logically to silliness if not challenged, because (a) no tax cut or measure of any other kind will ever take precedence over upping benefits, no matter what their other merits and (b) it would lead to the rejection of a measure – either in the tax system or the benefit system – which, for example, made the poorest million people in Britain better off by £500, except for the very poorest individual, who only benefited by £450. I think there must come a point where that kind of ideological purity on equality stops being quite so useful.

    1. Look, I agree with the 10k policy, of course, and was on your side against the Fabian attack on that. But focussing exclusively on this ratio:

      (tax paid)/(total income including credits/benefits/everything)

      runs some other risks of absurdity. Consider this situation: it’s 1997 and a family has £200 per week of total combined incomes (£100 original, £100 from the state in benefits and tax credits). The family pays £80 in tax on this in the form of various mostly indirect taxes. The LD’s shout “how unfair, you’re taking 40%”. The government agrees, and finds that the best way to alleviate this is to introduce a tax credit of £20, with the intention of cutting that 40% to 30%.

      But then the LD’s use the same method as before, and find that the tax paid is now £80/£220, which is still about 37% and still screams ‘unfair!’.

      That in microcosm is what I think has happened since 1997, and is why I am more comfortable with the IFS approach on this one. By putting some figures in the denominator rather than counting them as negative tax, there is an illusion that people who receive money net from the state are actually the state’s biggest contributors, because “their tax ratios are the highest of all”. I personally find this misleading, and I am sure a lot of median to high income earners who receive no benefits at all and DO contribute, Net, to the state, would find it annoying to be told that actually the people below them who don’t work are contributing more ….

      I personally prefer the attack that the Government needlessly involves the state in merrygoround of paying in and taking away – why not instead just take them out of tax altogether. But to do this on a regressive-fairness angle and ignore the very large amounts that the govt have redistributed to working and non-working families has some real flaws – and I’m not all that surprised that the IFS has highlighted them

  3. It would be nice to see some proper economic stimulus–at last.

    Slightly OT, but: I’m finding Avent less and less impressive: “Sadly, you can’t balance the budget with taxes everyone loves”. Er, yes, yes–but so what?

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