The Conservatives have seen the choice for the election as a simple one. Do you want the Conservative team to continue, who have presided over a decent recovery, with 2 million new jobs and now rising real incomes? Or do you want to hand the keys back to the people who crashed the car in the first place? Labour in its last period in government put up unemployment and brought down real incomes with a jolt.
Labour sees the election as being about the NHS, as we discussed before. Drawn into the economy, Labour has now pledged to get the deficit down, though by less than the Conservatives. Labour has pledged to avoid tax rises for most people, and has been imprecise about their public spending plans. Conservatives have been very clear about the overall pattern of spending, tax revenue and borrowing for each year of the next Parliament, but have not published details of how the extra cash public spending they are proposing is divided between departments.
The polls show either a Conservative government or a Labour minority with SNP support on a vote by vote basis. The SNP say they wish to end austerity, which they say means they wish to spend a bit more than Labour’s plans, and therefore borrow a bit more, whilst still gradually bringing down the deficit.
So there will be a difference- Conservatives will borrow less and get the finances on a stable and sustainable footing earlier.
The bigger difference will come in the attitudes towards enterprise and the private sector. More than 25 million people work in the UK private sector, more than five times as many as work in the public sector. The left of centre parties all see the private sector as needing more price controls, regulations, taxes and even state control and ownership. They have a range of policies to limit rents in housing, to control energy prices, to increase state control of the railways, to tax the banks more, to tax property and homes more, to tax foreign residents more and above all to tax anyone who is financially successful more.
This approach was tried by Mr Hollande in France, with very poor results. The French economy lost talent and money, the economy stayed depressed when the UK’s grew well, and in the end Mr Hollande had to moderate some of his ideas.
The choice on May 7th is between a policy which is delivering growth, more jobs and rising living standards, and a series of measures which however well intentioned will make the outlook worse.
Labour has proposed a number of interventions to control prices in the energy sector, for housing rents and certain kinds of lending. Such controls usually reduce supply and end up damaging those they are trying to help.