The Prime Minister’s decision to call an early election is, of course, primarily a great piece of political opportunism. Mrs May has surely been swayed by the latest opinion polls which suggest that the outcome will be the return of a Conservative government with a (much) increased majority.

As it happens, this should also strengthen the UK’s position in the upcoming negotiations with the rest of the EU. Some are worried that this will allow Mrs May to push ahead with a ‘super-hard’ Brexit that inflicts unnecessary damage on the economy. But these fears are difficult to square with the government’s increasingly moderate rhetoric on many issues – notably migration. Instead, the Conservative leadership is likely to use the election as a chance to secure a mandate for the type of Brexit that most people appear to want. There is already plenty of evidence that the public are swinging behind Mrs May’s more conciliatory approach.

Nonetheless, there is a danger that all parties now rush to produce manifestos with policy commitments which are ill-thought through. There are at least three significant risks.

One is that parties simply cut-and-paste commitments from previous manifestos even though the case for them is (now) weak. A prime example here is the costly and unfair ‘triple-lock’ on state pensions. The Conservative government had said it would review this policy ahead of the general election previously expected in 2020. Now there is a danger that the life of the policy is extended by default throughout the next parliament – and perhaps well beyond.

The second risk is that parties lurch towards increased regulation without any proper assessment. The jury is still out on the credibility of Matthew Taylor’s review of modern employment practices, but at least a meaningful review is underway. All parties should avoid commitments to populist but counter-productive interventions that reduce labour market flexibility, such as ‘clamping down’ on zero-hours contracts. They should also steer well clear of a bidding war on the national minimum wage. Instead, the UK should embrace the opportunities presented by Brexit to lighten the burden of regulation.

A third risk is that any attempt at fiscal discipline is abandoned. This might take the form of a raft of poorly-costed spending commitments. But it could also mean rolling back on previous promises not to raise taxes – or new commitments to hike them – as an alternative to expenditure control. These could be job-destroying too.

In short, manifestos produced in haste may leave too many people repenting at leisure.

Further IEA reading: Public Choice – A primer

Julian Jessop is Chief Economist at the IEA. He has thirty years of experience as a professional economist in the public and private sectors, including senior positions at HM Treasury, HSBC and Standard Chartered Bank. Prior to joining the IEA in March he was a Director and Chief Global Economist at the leading independent consultancy, Capital Economics. Julian has a First Class degree in economics from Cambridge University and post-graduate qualifications in both economics and law.


 

 

 

Leave a Reply

Your email address will not be published.