Echoes of Silence: Unveiling the Five Overlooked Issues in the 2024 General Election

General Election 2024: Five Key Topics Avoided by Major Parties

The Institute for Fiscal Studies is highlighting a "conspiracy of silence" surrounding the current election, suggesting there's substance to their claim.

Economics and Data Editor at Sky News, Ed Conway

Monday, July 1, 2024, 11:

The Institute for Fiscal Studies (IFS) has accused major political parties of a "conspiracy of silence" during this election, claiming they are not being transparent about their financial strategies.

Indeed, there is a valid concern. Primarily, the issue that the Institute for Fiscal Studies is highlighting involves the lack of transparency from the major political parties — Labour, the Liberal Democrats, and the Conservatives — regarding their strategies to address the looming financial shortfall in the government's budget.

There's no necessity to delve into every minute aspect, however, it's crucial to understand that all governmental budgetary forecasts rely on general predictions concerning future increases in expenditures, taxes, and economic expansion. This foundational projection is what economists refer to as the "baseline."

However, this standard projection has an issue: it predicts a modest rise in total government expenditure over the coming four years, roughly averaging an annual increase of 1% when adjusted for inflation. This might seem manageable, but history tells us that NHS expenditures tend to escalate faster than this rate. Furthermore, this 1% increase must also cover various other commitments, such as enhancements in education and defense budgets, among others.

Should significant portions of the budget be allocated to certain government sectors, this will inevitably mean less funding for others. Indeed, the Institute for Fiscal Studies (IFS) predicts that various departments, including the Home Office and judicial system, will experience budget reductions of 3.5% each year. Essentially, this signals a resurgence of austerity measures.

However, there's a clever aspect to this approach, particularly beneficial for the politicians. They need to establish a basic financial framework to ensure the rest of their calculations are consistent. Yet, due to the flawed process in which government budget allocations are determined, detailed decisions regarding the distribution of funds to specific departments only occur during the spending review. Significantly, this review is scheduled to take place after the upcoming election.

The outcome is that all the groups involved can act as though they have agreed to the minimum requirements, even though it's clear that additional funding will be necessary for those departments without safeguards (otherwise, it would signify a revert to austerity measures).

Indeed, the Institute for Fiscal Studies has a point: the figures presented in all the manifestos, Labour's included, are significantly eclipsed by a larger, unaddressed issue.

However, I believe the issue of silence is even more pervasive. It extends beyond just the topic of fiscal guidelines, which are already insufficiently discussed. Take into account five additional topics that the main political parties are failing to address (here, I refer to the Conservative, Labour, and Liberal Democrat platforms. The Green and Reform parties' platforms, to a degree, are less culpable in these specific areas, though they have their own shortcomings).

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Increase in tax rates

Initially, despite assurances from Labour, the Conservatives, and the Liberal Democrats that there would be no increases in significant tax rates, the truth is that taxes are on the rise. By the end of this parliamentary term, everyone will be paying more in taxes than they are currently.

Certainly, everyone will face higher income tax bills. This increase arises not from higher tax rates, but because we'll be taxed on a larger portion of our earnings due to the government's decision to maintain the current thresholds for different tax rates. This policy, implemented by the current administration, has not been challenged or promised to be reversed by any other political parties.

Additionally, while the primary political groups may profess diverse ideologies, they all appear united in their faith in an unconventional fiscal doctrine: the mythical revenue-generating tree of tax evasion prevention. Each of their platforms predicts that they will generate vast amounts of money — in fact, more than from any other single revenue-enhancing strategy — by intensifying efforts to combat tax avoidance.

It's certainly feasible to generate a portion of the needed funds by targeting tax avoidance, but it's not a guaranteed solution. The fact that it is a key strategy for revenue generation in each party's plan is quite telling. Additionally, it's frequently overlooked that increasing revenue through these means will also heighten the overall tax load.

All parties concur on one additional point they are reluctant to challenge: the fiscal regulations. The government adheres to specific guidelines that mandate maintaining borrowing and, more critically considering the current figures, overall debt within predefined limits.

However, it's important to note that these regulations are not set in stone. They aren't inherently flawless. The debt regulation is highly susceptible to manipulation. It has not prevented the Conservatives from increasing the national debt to its highest point in years. Moreover, it's debatable whether the specific type of debt being measured (net debt excluding Bank of England actions) is the appropriate metric.

This leads to another minor conspiracy theory. Among all the parties participating in this election, only the Reform Party is addressing the issue of whether the Bank of England should continue paying substantial interest amounts to banks as it concludes its quantitative easing initiative. Originally suggested by a progressive think tank, the New Economics Foundation, this policy is currently a topic of conversation among numerous economists. It is also a strategy that the Labour Party might very likely implement to generate additional funds should they come into power. However, it seems to be a topic that no one is eager to talk about. Strange.

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Effects of Brexit

Interestingly, the one topic that appears to be unanimously avoided this time around is, as you might have anticipated, Brexit. Unlike the 2019 election, which was dominated by discussions of Brexit, this current campaign has almost completely sidestepped the issue. Maybe that comes as a relief. It seems many feel that after discussing Brexit extensively for the last ten years, a respite is in order. This sentiment is evidently shared by the major political parties.

Though the effects of exiting the European Union are frequently exaggerated (it's not the culprit behind all our economic issues), it still plays a significant role in our current economic difficulties. Additionally, how we interact with our neighboring economies remains an important matter for the future.

This leads us to the last and often overlooked point. The minor issues frequently debated in electoral campaigns pale in comparison to larger global challenges, which candidates appear hesitant or unprepared to address. Consider, for instance, the situation with China and electric vehicles.

Recently, the United States and the European Union have imposed significant tariffs on Chinese electric vehicles (EVs). In the United States, these tariffs are largely symbolic as the country imports a minimal number of Chinese EVs. However, in Europe, Chinese EVs constitute a significant portion of the market, a situation that is similar in the UK.

Posing the query: what actions will the UK take? There's a compelling argument that the UK ought to follow the lead of the EU and the US to safeguard its local automotive industry. Without introducing tariffs, the UK risks being inundated with an influx of vehicles from China—particularly as these vehicles now face tariffs in other European markets—further challenging British car manufacturers who are already finding it difficult to compete.

Similarly, implementing tariffs will cause the price of inexpensive Chinese-manufactured vehicles (such as MGs, the majority of Teslas, and all the latest BYDs, among others) to increase significantly. Is it truly an opportune time to burden consumers with these additional expenses?

To put it succinctly, the problem is significant. Surprisingly, it has not been prominently featured in the current campaign, which seems irrational. This lack of attention can similarly be observed in discussions on the wider pursuit of minerals, the general strategies for achieving net zero emissions, and the methods for intensifying sanctions against Russia to enhance their efficacy.

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Local church election

Elections often focus on local concerns, yet considering the magnitude of these extensive, global challenges (among numerous others), this particular election seems exceedingly local in scope.

To summarize succinctly: indeed, there have been numerous omissions. Vast ones. The extent of the "conspiracy of silence" far surpasses what the IFS has discussed.

It has always been this way.

Explore further: Understanding the US's decision to levy a 100% tariff on Chinese electric vehicles. Urgent measures required for the UK to be a contender in the green revolution.

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Recall when a political party last bravely tackled persistent problems that were typically avoided in their campaign platform. Specifically, the 2017 Conservative manifesto stood out as it promised to finally address the tangled issue of social care in the nation.

It aimed to address a significant societal problem, that of disparities between generations, thereby preventing younger individuals from bearing the financial burden of supporting older generations.

The manifesto led to a catastrophic decline in electoral support, significantly contributing to Theresa May's plummet from a 20-point advantage to a hung parliament.

Despite the fact that the manifesto no longer dominates discussions, it's clear that contemporary political advisors still heavily consider its implications. This is evident in the notably brief nature of this year's campaign and major manifestos.

Elections are seldom decided by policy plans, yet occasionally, they can be derailed by them.

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