‘Hard to see’ how Labour manifesto pledges could be delivered without ‘substantial increases’ in taxes, IFS says

It is “hard to see” how Scottish Labour’s manifesto pledges could be delivered without a “substantial increases” in Scottish taxes, the Institute for Fiscal Studies (IFS) has said.

An IFS researcher called the manifesto a “strange beast” because it focuses mainly on short-term and very long-term plans rather than for the five-year term of the parliament.

The party’s plans include an “enormous number of pledges” which would either expand service provision or increase income for a number of groups and they follow a “Scottish trend” of making services free to everyone rather than targeting low-income groups.

Manifesto commitments include a jobs guarantee for under-25s, long-term unemployed and disabled people, the expansion of free childcare, abolishing charges for free social care, free lunches for all primary-aged children all year round and free bus travel for under-25s, with an ambition to make it free for all.

The think tank warned that in the short term, the cost of Labour’s proposed stimulus and recovery package “significantly exceeds” the remaining funding available to the Scottish Government for this year, meaning it would require more UK Government funding to deliver it.

Over the long term, the IFS says the ambition to create a more expansive welfare state would require either tax rises affecting not only those earning over £100,000 a year or more UK Government funding.

The IFS calls it “disappointing” that apart from the short-term COVID recovery measures, Labour has not set out how much its commitments would cost, but adds that “the list of policies clearly has a significant net cost in both the short and longer term”.

Christine Farquharson, a senior research economist at the IFS, said: “The Scottish Labour manifesto is a somewhat strange beast – more a plan for the next 18 months and then for the next decade or more, rather than a five-year parliamentary term.

“On a range of issues, it reflects the seeming consensus in Scottish politics: doubling the Scottish child payments, universal free school lunches for primary school aged children, and scrapping non-residential social care charges, to name a few.

“Where it stands out more is on the scale of short-term spending and longer-term ambitions.

“Other parties also set out short-term stimulus and recovery measures, but Labour’s dwarf them, and its one-off Jobs for Recovery scheme, guaranteeing six months of public sector employment for many of those out of work, is unprecedented in the UK.

“Also unprecedented in the UK is Labour’s plan to extend funded childcare entitlements to 50 hours a week, every week, for all children in the longer run – this would mean, near enough, that all formal childcare is paid for by the government.

“It is a mark of the scale of Labour’s promises that such a big reform doesn’t even feature as one of the party’s top pledges in the manifesto document.

“How this would all be paid for is not at all clear.

“The manifesto’s short-term plans exceed the Scottish Government’s unallocated funding for this year, and wouldn’t be deliverable without additional UK government funding.

“Longer-term plans would also require tax rises – not only affecting those earning over £100,000 – or a very substantial loosening of the purse strings by the UK government.”