Reaction to Conservative Party manifesto
“This manifesto contains some sensible measures but also many policies that would increase the role of the state and make it harder for all to benefit from a free economy. It’s concerning that we may be seeing the advent of a Conservative Party which fails to understand that economic and social problems are more likely to be eased by free market solutions than by increased state intervention, however well intentioned.
“Some important issues of intergenerational inequality – the only form of inequality definitely on the rise – are being addressed. It’s right that social care be paid for by those who receive it, or by their families. This policy means that taxpayers get the bill only once equity in a recipient’s home falls to £100,000, which is a step in the right direction. Changes to the expensive ‘triple-lock’ are well overdue but will save relatively little, and the withdrawal of some pensioner benefits for the well-off is right but small fry. These measures will though ensure that public money is spent more wisely, rather than on universal benefits regardless of individual need or ability to pay.
“The retention of an arbitrary target for net migration is very disappointing. Even if achievable, this would be delivered through clumsy and counter-productive interventions. Measures to make it more expensive to employ foreign workers are simply another form of protectionism and will be bad for our economy.
“An increased burden of regulation and further government interference in price and wage setting will raise costs, undermine competition and reduce labour market flexibility, resulting in job losses and higher inflation.
“The delayed timetable for eliminating the budget deficit suggests that the Conservatives’ commitment to fiscal discipline is continuing to weaken. Similarly, ditching the tax-lock promise not to raise VAT, NICs or income tax may make the Chancellor’s job easier but should have been replaced with a commitment to keep the overall tax burden below a third of GDP.”
Notes to editors:
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Relevent IEA publications
In 2016 the Institute of Economic Affairs published ‘Free to Move’, which outlines the costs and consequences of restrictions on migration. To download this report please click here.
In 2014 the Institute of Economic Affairs published ‘Defusing the debt timebomb: challenges and solutions,’ which considers that spending restraint, pro-growth reforms and fundamental changes to pensions and healthcare provision are urgently needed. To download this report please click here.
In 2014 the Institute of Economic Affairs published ‘Growing the UK pension pot: The case for privatisation.’ To download this report please click here.
In 2016 the Institute of Economic Affairs published ‘Taxation, Government Spending and Economic Growth’, which called to abolish twenty taxes to improve and encourage economic growth. To download this please click here.
In 2016 the Institute of Economic Affairs published ‘And how much do you earn? Public pressure for regulation of pay’, which finds political intervention in wage-setting risks damaging UK employment. To download this please click here.
In 2014 the Institute of Economic Affairs published ‘The Minimum Wage: silver bullet or poisoned chalice?’ which finds that the minimum wage has failed to target poverty and youth employment. To download this report please click here.
In 2015 the Institute of Economic Affairs published ‘Flaws and Ceilings: Price controls and the damage they cause’, which explains why price controls are so damaging to our economy. To download this please click here.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems and seeks to provide analysis in order to improve the public understanding of economics.
The IEA is a registered educational charity and independent of all political parties.