Labour's manifesto is all about rebuilding the party's reputation

http://www.theguardian.com/politics/2015/apr/13/labour-manifesto-rebuilding-reputation

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Labour spent most of the 1990s rebuilding its reputation as a party of economic competence. The damage caused by being in power during Britain’s most severe postwar recession means that process has begun all over again.

It is not unusual for voters to trust the Conservatives more than Labour over the running of the economy. What has been striking during this parliament has been the size of the Tory lead. So the budget responsibility lock in line one of Labour’s manifesto is an attempt to confront this weakness head on. It is the equivalent of Gordon Brown in 1997 promising to keep the top rate of income tax at 40% and to stick to Ken Clarke’s spending plans.

The manifesto makes four big commitments. The first is that it is a menu with prices, with every spending promise matched by a spending cut or a tax increase elsewhere. The second is that there will be spending cuts until the deficit is cleared. The third is that borrowing will come down every year in the next parliament. The fourth is that the national debt will start falling as a percentage of national income over the next five years.

So how credible are these promises? For many of the specific commitments the sums do add up. For example, the pledge to freeze rail fares for a year is paid for by scrapping road schemes, for which money has been allocated. Similarly, Labour could allocate what is currently spent on free schools to its national child care plan.

There are, however, areas where the commitment is less solid than it sounds. Labour does not know for certain how much it would raise from its mansion tax or from the proposed crackdown on tax evasion, which will be used to boost NHS spending.

The pledge to continue cutting spending until the deficit on current spending is cleared is tougher than it might have been. According to the Institute for Fiscal Studies, to achieve a current budget balance Labour only really needed to stick to the spending plans for 2015-16 it would inherit from the coalition.

Ed Miliband has ruled out this option, which means that Labour would raise taxes or cut spending in order to reduce the deficit after 2015-16. Unlike George Osborne, who has said he would find an additional £30bn from Whitehall departments, welfare cuts and a tougher tax regime, Labour has neither specified how much it wants to save nor by when. The figure will be somewhere between zero and the £30bn in Osborne’s plans.

Related: Labour election manifesto: key points

Reducing the budget deficit year-on-year is perfectly feasible provided the economy does not fall into recession. If that were to happen, Labour would either have to rip up the pledge or drive the economy deeper into recession. The same applies to the promise to get the national debt falling. The final two pledges have little economic relevance: they are there for political purposes.