Government afford pledges?

The government has been promising a lot of new money

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Government borrowing to soar past forecast after Boris Johnson spending pledges - IFS

The Institute for Fiscal Studies (IFS) said the Treasury will go a further £50bn into the red, largely due to a combination of increased spending commitments made by Boris Johnson since becoming Prime Minister and a weakening economy.

It means the Government's spending commitments will be close to the levels promised in Labour's 2017 election manifesto - which the Conservatives claimed at the time was unaffordable.

Specifically, the IFS said planned Tory spending on the NHS and the police next year will be higher than Mr Corbyn promised two years ago.

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Can the government afford its spending pledges?

By Joe Harker

The government is on a general election footing and thus new spending pledges are being thrown around left and right in order to attract voters.

Swing seats are receiving funding while there have been announcements that more money will be available for education and the NHS, both popular areas to pour more money into.

However, this jump in spending has not been accompanied by higher taxes or other ways to raise money.

All of this begs the question: how exactly are they planning on paying for all of this?

The Claim:

It turns out that they're going to borrow it.

The Institute for Fiscal Studies says the treasury will go £50 billion further into the red after a number of new spending pledges made by Boris Johnson and Sajid Javid and a weakening economy cost the government more.

Brexit will hurt the economy and the Tories are promising close to the spending commitments of Labour in 2017, which were accused of being unaffordable at the time. Spending on the NHS and police will be even higher than Labour promised in their campaign for the previous general election.

The Financial Times reports that the government's spending pledges are setting off alarm bells as the chancellor of the exchequer is writing cheques his treasury can't cash.

Matt Chorley of The Times writes that the Tories are practicing "bad economics but smart politics" as people vote for politicians waving the chequebook around and there's likely a general election coming up.

The government can't afford the spending pledges they are making but that's a bridge for them to cross after a general election if they win and not at all if they lose.

The UK is already strapped for cash, if the government wants to spend more then they must either raise taxes or borrow the money. Since raising taxes is more of a Labour thing and they'd rather cut them the Tories are going to have to borrow instead.

The Counter Claim:

However, the Guardian reports that Javid and Johnson believe their high spending will end up paying for itself as their investment will stimulate the economy.

This belief relies heavily on buying the lie that Brexit will be good for the economy when it won't be, meanwhile government investment can swallow up money for years before it starts to pay itself back.

Economic growth that might occur as a result of government spending will also be set back by Brexit, particularly as the government's plan appears to be completely unworkable for the EU, so their hopes of growing the economy with spending might merely keep it flatlining while the debt balloons in the background.

The government can't afford the spending pledges they're making and they'll drive up the debt if they do try it, but making these promises now could win them a majority at a general election which means they'll have another five years in office.

Besides, plenty of election pledges are broken.

The Facts:

The Tory government plans on spending £325 billion next year, just shy of Labour's promise to spend £329 billion. If the latter figure is "unaffordable" then what is the former?

The IFS predicts that borrowing could rise to £100 billion while debt would reach 90 per cent of national income, a level not seen since the 1960s.

The deficit is forecast to be around £52.3 billion next year, double the £21 billion forecast made in March. This government's fiscal irresponsibility is a far cry from previous Conservative governments attempting to eliminate the deficit.

Johnson has already been told his spending pledges mean he can't make tax cuts as the outlook for public finances has "worsened dramatically" in the past few months.

Government spending pledges are popular with the public but The Times reports people are concerned over how they will be paid for.

72 per cent of the public like the pledge to raise the minimum wage to £10.50 over the next five years, while 73 per cent approved of more money for hospitals.

People also liked plans to give more police officers tasers but were more mixed on a £5 billion plan to bring broadband to more parts of the country with 42 per cent supporting it and the same figure opposing it.

However, only 25 per cent of those surveyed said they thought the government's promises were affordable, while 42 per cent said they were certain that the money wasn't there to afford all that was promised.

To sum it up, the government can't afford their pledges but they know it'll make them more popular with a general election likely. If they do have to fulfill their promises then they'll borrow money to do it. Whatever happened to the Conservatives being the party of fiscal responsibility?

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