The Institute of Fiscal Studies has given a lukewarm reception to the financial promises in the Conservative Party’s manifesto.The IFS has promised to provide analysis of all the major party manifestos as they are published.
The Conservatives propose a range of tax reforms – a transferable tax allowance, cuts in savings taxation, and cuts in fuel duty, alongside changes to benefits for pensioners and families with children.
The overall winners in such changes, says the IFS, would be middle-income earners.
The gains are lower for those on higher incomes because they gain proportionately less from the reforms to family taxation and petrol tax than those in the middle. The lower income groups gain less because most are not income taxpayers, and so do not benefit from the income tax cuts.
The IFS has also given some thought to the Conservatives’ pledge to reduce public spending by eight billion pounds. It says that the majority of this windfall is due to initiatives to make savings, such as reducing fraud or administration costs, and that the other parties could achieve the same savings.
It says that in the long run, a desire to reduce taxes must, if it is to be achieved, be matched by a willingness to identify reductions in the scale of public services.