Credibility Gap

MONDAY, JANUARY 04, 2010

Credibility Gap

Can we stand four months of this? Here we are with a government whose fiscal policies are shot to buggery and back, and whose financial projections aren't worth a bucket of warm spit. Yet they have the brass neck to criticise others for lack of credibility.

According to Darling today:

“The Tories have made over £45 billion of promises, but can barely explain how they can pay for a quarter of this. This leaves them with a credibility gap of £34 billion."

How dare they! Especially since half Darling's so-called Tory promises aren't promises at all (like the supposed promise to rescind the new 50p tax rate). It's yet another dodgy dossier!

Except... when you actually read it, Darling's 150 page Tory costing paper turns out to be rather good. Obviously we shouldn't take the headline total seriously, but at the detailed level it's a useful pricing guide to all those vague aspirations that the Tories have been tossing around for months. For example:

• Extra revenue likely to be raised by that famous non-doms tax? A mere £50m pa (official HM Treasury estimate, confirming our long-held scepticism about George's claim that it would raise £3.5bn pa - see here).
• Cost of transerable personal tax allowances for married couples? £4.9bn pa (official HMT estimate).
• Cost of maternity nurses for all? £492m - £2.8bn pa (official HMT estimate).
• Cost of 45,000 additional single rooms in NHS hospitals? £9.5bn over 5 years (official HMT estimate).

So Darling's actually given us something useful. Suddenly we've got HMT's handy guide to the cost of those Tory tax and spend teasers. Sure, you can argue with the assumptions underlying their cost estimates, but they are all spelled out in detail, and this is a lot more than the Tories have provided themselves.

Which neatly highlights what's so very wrong with the way we currently manage our tax and public spending debate. Despite being in the biggest fiscal hole since WW2, our politicos are conducting an election campaign based on evasion and half truths. None of them are being candid about how their own sums add up, and we find ourselves in the ludicrous situation of turning to Labour to tell us what theTory plans would cost, even though we know Labour's own plans are riddled through with deception. 

Given the grim decades ahead we need to address this. So here's a suggestion: when George sets up his Office for Fiscal Responsibility, it should do more than simply monitor the incumbent's policies. It should also issue costing estimates for the main alternative policies proferred by the opposition parties, especially in the months leading up to an election. 

PS Talking of credibility gaps, Fraser Nelson does a horribly good job on Cam's campaign launch speech at the weekend. Calling on Cam not to take us for fools, he highlights the continuing mismatch between Tory pledges to spend more on the NHS, overseas aid, and high speed railways, and the disagreeable fact that we have no money. We surely deserve better than that.