UK Politics

Will voters know enough before they cast their ballots?

Ballot boxes
Image caption Will voters know enough before the election to make informed choices?

Next week, I expect to be kept busy by the parties' manifesto launches. There may be a lot of discussion of smaller policies: right-to-buy, inheritance tax, tuition fees and train companies. But keep your eye on the big picture. To my mind, there is one big thing that we need to know from each of the two parties who are likely to form the rump of the next government - Labour and the Conservatives each have one very important question to answer.

For Labour, the most important unknown concerns their plans for the budget. Earlier this year, the party voted to sign up to a coalition pledge on fiscal responsibility. If you will excuse the jargon for a moment, they promised to "achieve cyclically-adjusted current balance by the end of the third year of the rolling, 5-year forecast period." So what does that mean?

It means that their first budget would aim for one measure of the Budget balance to settle at around zero (or in surplus) three years out - in 2018-19. This measure is of the current budget, so only counts day-to-day spending. It is also "cyclically-adjusted" so they don't include extra spending caused by economic weakness or extra tax revenue driven by a boom.

Without cuts to welfare or tax rises, meeting that single commitment would require real cuts of around £6.4bn to departmental spending from the levels fixed for this year (2015-16). That's about a 2% cut to those budgets overall.

But Labour has sent some mixed messages, and has stated that it wants to balance the current budget at some point during the parliament. If the party were to ditch that fiscal rule and pledge to balance the current budget in 2019-20 instead of 2018-19, they can actually avoid the need to cut departmental spending and have it rise very slightly from 2016 without needing to pencil in more short-term tax rises.

By 2019-20, they could spend about £9.6bn more in real terms on day-to-day costs than we are spending this year. It's a very gentle rise over a parliament, but it is a rise (and would, of course, mean slightly higher national debt). If they delay balance until 2020-21, the very end of the next parliament, it would be easier still, although we do not have official forecasts for that year so I can't give you figures for that.

The big question for the Conservatives affects their tax and spend plans, too, albeit indirectly. We know the party wants to reduce benefit spending below its projected path by £12bn between 2016 and 2018. But we need to know more. We know where £3bn will come from, but nothing of the remaining £9bn. And this is important - and not just because knowing which benefits will be cut (and who will lose) is, itself, important.

Cutting £9bn is not easy to do without broader effects. The coalition has not managed to achieve its planned reductions in, for example, incapacity benefit (and its successor and predecessor benefits). Declan Gaffney, an expert critic of the coalition's welfare reforms, has estimated that that bill was supposed to fall by £2.9bn per annum over this parliament, but it actually rose by £741m.

If the Conservatives cannot, indeed, take the full £12bn out of welfare, it will mean deeper cuts for government departments - some of which, such as the Home Office, are already worrying about further double-digit cuts as part of the Tories' plans.

The unknowables

After all that, though, it is also worth bearing in mind how much the manifestos matter. A hung parliament is likely. so journalists must probe aggressively to establish what is a red line for parties and what is not so you know what, exactly, you may voting for. Some of these things may be bartered away (the Resolution Foundation is running articles on what deals might look like).

It is also worth ruminating on the fact that predictions are difficult, especially about the future. A risk that has been preoccupying me is that the NHS could need an enormous sum of extra cash in the coming years. At the moment, the politics of the NHS circulate around a short document published last autumn by Simon Stevens, the chief executive of NHS England. He said that, if it became no more efficient than it is at present, the NHS would need another £30bn by 2021.

But he proposed that if the NHS were given staged budget increases, eventually worth £8bn a year, the NHS could change its methods, reform itself and avoid the need for further budget increases. You can see why politicians welcomed it: it promises £30bn of service for just £8bn.

The Conservatives have been edging towards a commitment to the £8bn for a few weeks (finally committing tonight) and the Liberal Democrats are already there. We await full plans from Labour and Ukip, although both parties have pledged some specific sums.

Image copyright PA
Image caption Simon Stevens' plan relies on some huge improvements in NHS performance

But the Stevens plan is not a deal with any firm guarantees: it requires the NHS to become more efficient at three to four times the long-term average speed every year for an entire parliament. If efficiency growth does not do that, but runs instead at its long-run rate of improvement, Mr Stevens estimates they will need an additional £21bn per annum by 2020-1.

These sums are not fixed in stone. Mr Stevens might just be wrong. And rather than paying up, we could allow service quality or availability to decline. But the parties are not keen on that and these are not idle worries: one prominent health think-tank is sceptical about recent productivity growth. Since at least February, Jeremy Hunt, Conservative health secretary, has been hinting publicly that £8bn per annum might well not be enough.

So the NHS has the capacity to blow the next government off course - whether because it cannot keep up with demand or it eats through the money pledged to it. Indeed, if the NHS's budget demands run much higher than £8bn per year at the end of the next parliament, it could render all the promises being printed up by apparatchiks in party HQs irrelevant.

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