IFS: Labour manifesto doesn’t raise enough cash to fund ‘genuine change’

A leading think tank has warned Labour’s general election manifesto offers “no indication” of how it would raise enough cash to deliver “genuine change”, with proposed increases to public spending only “tiny, going on trivial”.

But Labour leader Keir Starmer said in his speech he made “no apologies for being careful with working people’s money”, highlighting Liz Truss’ mini-Budget and warning “hard choices’ were needed to reform the economy and public services.

While the Institute for Fiscal Studies (IFS) welcomed Labour’s election platform for its “focus on economic growth and stability”, it also criticised Labour and other parties for what it dubbed a “conspiracy of silence on the difficulties they would face” on public finances.

IFS director Paul Johnson suggested the manifesto offered insufficient commitments overall given Labour has diagnosed “deep-seated problems across child poverty, homelessness, higher education funding, adult social care, local government finances, pensions and much more besides”.

READ MORE: Full manifesto costs breakdown – and how tax and borrowing fund it

Starmer unveiled the party’s manifesto at a launch event today, setting out Labour’s platform of policies on which it will fight the general election.

Johnson said: “This is a manifesto that promises a dizzying number of reviews and strategies to tackle some of the challenges facing the country. That is better than a shopping list of half-baked policy announcements.

“But delivering genuine change will almost certainly also require putting actual resources on the table. And Labour’s manifesto offers no indication that there is a plan for where the money would come from to finance this.”

READ MORE: Rachel Reeves says Labour has ‘no plans’ to increase capital gains tax

Johnson did welcome the party’s commitment to planning reform, industrial strategy, and regulatory reform – all of which he said were “needed”.

However, he said that the fiscal challenges an incoming government would face are “already perfectly clear”.

“Yes, growth could surprise on the upside – and if it does, then the fiscal arithmetic would be easier. But if it doesn’t – and it hasn’t tended to in recent years – then either we will get those cuts, or the fiscal targets will be fudged, or taxes will rise.”

He added: “The books are open. A post-election routine of shock-and-horror at the state of the public finances will not cut it.”

But Starmer said in his speech: “We will make new choices to reform our economy and public services, hard choices, choices ducked for years.

“These choices will be fully-funded and fully-costed. That is non-negotiable, you cannot play fast and loose with the public finances. We have lived through the damage that this does. The Government we have now played fast and loose with the finances, and working people paid the price.”

He added: “I make no apologies for being careful with working peoples’ money, and no apologies for ruling out tax rises on working people. And this isn’t just the election, don’t think it’s just politics, this is an issue of conviction.

“I don’t believe it’s fair to raise taxes on working people when they’re already paying this much, particularly in a cost-of-living crisis.”

The Labour Party was not immediately available for comment.

Find out more through our wider 2024 Labour party manifesto coverage so far:

READ MORE: Labour manifesto launch: Live updates, reaction and analysis

READ MORE: Full manifesto costs breakdown – and how tax and borrowing fund it

READ MORE: The key manifesto policy priorities in brief

READ MORE: Labour vows to protect green belt despite housebuilding drive

READ MORE: Watch as Starmer heckled by protestor inside with ‘youth deserve better’ banner

READ MORE: GMB calls manifesto ‘vision of hope’ but Unite says ‘not enough’

READ MORE: Manifesto commits to Brexit and being ‘confident’ outside EU

READ MORE: Labour to legislate on New Deal for Working People within 100 days – key policies breakdown 

READ MORE: Labour to give 16-year-olds right to vote

READ MORE: Starmer says ‘manifesto for wealth creation’ will kickstart growth

READ MORE: Dodds: ‘Our manifesto is a fully funded vision, while Tories offer a Christmas tree of gimmicks’

READ MORE: IFS: Labour manifesto doesn’t raise enough cash to fund ‘genuine change’

READ MORE: ‘Labour’s manifesto is one the party can promote with confidence’

Read more of our 2024 general election coverage here.

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