• The Invisible Hand

Election Special: Conservatives

This article examines the economic policies of the Conservative Party before the UK General Election on the 12th December 2019. There will be a new article each day of the next week so please subscribe for updates.

Election coverage tends to treat economic policy as a separate affair from the NHS, Brexit and the environment. However, economics links all of these policies together and therefore economics must be the driving factor behind anybody's vote. Economics looks at welfare and how to maximise our living standards and that is fundamentally the most important consideration for any voter. Keep on reading to learn more about each party's specific policies...

In a complete U-turn all Conservatives seem to chosen to ignore austerity and decide it was a mistake after all. They may make the excuse that the economy has recovered yet there is very little evidence for this. Productivity is still stagnant. Economic growth is still stagnant. National debt is showing no sign of decreasing. The real reason for this reversal is that the Conservatives realise that they cannot win on a platform of austerity after nine years. Austerity was a mistake in the first place so this is a positive change in economic policy. However, the Conservatives have just demonstrated that austerity was completely unnecessary. Now the Conservative Party is not based on an sort of ideology just what will won them an election. This is no way to run a country; conviction and consistency is a necessity to good economic policy.

Nevertheless, the pumps will be back in action from 2020. There will be £20.5bn in real terms for the NHS by 2023-2024 which includes pledges for 50,000 ‘new/more’ nurses and 40 new hospitals in 10 years . Once these pledges have been examined in more detail they have been found to be rather dodgy. Only six hospitals are being built and of those 50,000 ‘new’ nurses 16,000 are already in work. It is hard to trust the Conservatives to deliver anything significant on the NHS. However, the NHS does not just need more money. It needs productivity improvements and skilled Labour. However, much the Conservatives may protest, a points-based immigration system cannot provides the flexibility of labour needed to staff the NHS. Nothing can be better at allowing health workers to come to the UK than an open, welcoming, totally free immigration system.

The Conservatives are going to take some important and necessary steps to combating the UK’s productivity problem which is presently the biggest economic challenge. For example, they are pledging £28.8bn on road building and £500m a year for repairing potholes among other things. This is exactly what we need but it is not on the same level as Labour so there is a risk it might be insufficient to improve productivity. Unlike Labour they are putting more emphasis on R&D spending which they want to raise to 2.4% of GDP. Along with infrastructure this is a key aspect to improving productivity so it is an important pledge to make.

On taxation they have rightfully chosen to freeze the cut in corporation tax which would have brought the UK to an unprecedented position internationally and cost £6bn. On National Insurance contributions their policy is more logical since it will benefit all people. However, their other plan to raise the payment threshold is wrong since it will only benefit the rich and not those who do not have to make these payments. There is also a question of how much people will benefit from a tax cut when the money could have a more significant impact on living standards if it was spent on infrastructure or public services.

Overall, it is welcome that the Conservatives are rejecting austerity, but voters can have little confidence that the Conservatives would keep to their pledges. Voters may also judge that more radical action is necessary to tackle the issues in our economy.

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