Before Brexit fever hit Britain, economic spending announcements used to dominate elections.
Former US president Bill Clinton is still known for his “it’s the economy, stupid” quip, a motto that helped him win the keys to the White House in 1992.
Even with Brexit dominance, the announcement of each party’s fiscal policies has continued to be a key moment in the run-up to the December 12 election.
Here is what each of the main parties would do if they win power:
- Have the Tories turned on the spending taps?
Theresa May might have announced “austerity is over” but it will be Boris Johnson who wants to properly put some distance between the David Cameron era and any future administration with him at the helm.
Chancellor Sajid Javid has vowed to keep a “balanced budget” but while borrowing more to invest in hospitals, roads and railways.
Day-to-day spending “cannot exceed what we bring in”, he said in a speech in Manchester on Thursday.
But the purse strings will be loosened for long-term projects, Mr Javid confirmed, increasing the borrowing cap for investment in infrastructure from 1.8% of GDP to 3%.
Government borrowing is set to reach £55 billion in 2019-20 and the Chancellor’s tinkering with the fiscal rules is likely to provide tens of billions extra for upgrades under a new Johnson administration.
“It means billions of pounds more to spend and the infrastructure revolution that this country needs,” said Mr Javid.
- What is Labour rivalling them with?
Shadow chancellor John McDonnell is thinking bigger when it comes to spending, doubling how much Labour intends to invest compared with its 2017 manifesto.
Not content with promising to borrow £250 billion over a 10-year period at the last election, Mr McDonnell told supporters in Liverpool he would up that to £400 billion.
In its first term, a Jeremy Corbyn-led government would be borrowing £55 billion per year, up from £25 billion.
It will be divided over two pots – the £150 billion social transformation fund focused on schools, hospitals, care homes and council houses, and a green transformation fund designed to help Labour meet its tight 2030 net-zero carbon economy pledge.
It would involve upgrading energy and transport networks, while also investing in greener energy such as wind farms and providing loans for people to buy electric cars.
- Is any other party looking to compete with those kind of numbers?
The Green Party certainly will. The environmentally minded party wants a £100 billion-per-year investment programme for its Green New Deal, intended to make the UK carbon neutral by 2030.
While £9 billion would come from a 5% hike in corporation tax, £91 billion would be raised through borrowing to retrofit insulation in homes, upgrade to greener transport modes and end the use of gas boilers.
- Does all this extra money have to come from borrowing?
Some say not. The Liberal Democrats, who would cancel Brexit altogether if leader Jo Swinson wins a majority, say their revoke stance would create a “Remain bonus” of £50 billion over the next five years.
The party’s Treasury spokesman Sir Ed Davey said that was the extra cash the government would have in its coffers if the UK remained in the EU, predicting the economy to be 1.9% larger in 2024-25 than if Brexit went ahead.
Sir Ed has already pledged £11 billion to improving mental health care and says the Lib Dems would “decarbonise capitalism” through green finance initiatives.
- What do the experts make of all this?
The Institute for Fiscal Studies (IFS) has crunched the numbers and says both the Tory and Labour announcements would lead to “substantial increases in government spending”.
The raised Tory threshold for public investment, upped to 3% of GDP, would be the highest level sustained at any point in the last 40 years, according to IFS researchers.
Labour’s plan to spend an extra £55 billion per year on investment over the next five years would more than double public investment spending – expected to stand at £47 billion in 2019-20 – increasing it to a “level unprecedented since the very different era of the 1970s”.
“It would take UK government investment spending from around the bottom of the international league table to around the top,” said a spokeswoman.
On the Lib Dems’ “Remain bonus”, the IFS’s Paul Johnson said the £50 billion estimate – a £10 billion increase a year – was in line with its forecasts but added the caveat that there was a “huge amount of uncertainty” in such predictions.