PLANS announced yesterday by Labour leader Ed Miliband would saddle the UK with more borrowing and therefore more government debt than under Conservative plans, according to the Institute for Fiscal Studies.
Deputy director Carl Emmerson said Miliband’s plans would result in “less spending cuts”, by vowing to balance the books rather than run a surplus as Tory chancellor George Osborne plans. And by committing to investment borrowing, debt could go up under Labour.
“They [Labour] want to balance the deficit on day-to-day spending, in other words, allow borrowing to be carried out for investment purposes… That would require some cuts in the next parliament, but nowhere near as much as what the Conservative aspiration to eliminate the whole budget deficit would imply,” he said.
Yesterday, Miliband set out his plan to tackle the deficit, if elected, including ruling out an increase in VAT. Head of tax at the Institute of Directors Stephen Herring said the party was likely to look at increasing National Insurance or income tax instead.