It may be the second worst job in the country, but the next Chancellor has an extremely important role in ensuring economic recovery for the UK. The biggest challenge currently facing the country is cutting the budget deficit, so it is vital that whoever wins the election on May 6th has a coherent plan to reduce it. The Chancellors debate in March gave us the opportunity to see how the three major parties would tackle the debt, but the prospect of an extremely tight General Election has prevented the real issues being challenged head on.
A recent study undertaken by the Financial Times suggest that all three major parties have a £30bn hole in their party pledges. So as Vince Cable has said, there is an elephant in the room; and whilst everybody acknowledges it, not nearly enough is being done about it.
The Liberal Democrats claim that they can make the average household £700 better off, paying for this in full by increasing taxes on the very wealthy; what they aren’t telling you is that after the election they will have to find the equivalent of £1,100 per person to tackle our budget deficit. But they aren’t the only ones.
The Labour Party who announced their budget last month, which Gordon Brown claims will not be changed after the election, will also have to find this extra money. Their promise to protect frontline services may have to be broken, and if not, other services may face cuts of up to 25 percent. Another noticeable absence from their manifesto is the pledge to stop an increase in VAT which may give an indicator of what is to come after the election.
The Conservatives have perhaps put themselves in the most difficult situation. Although they wish to cut the deficit quickest, their plan to partially remove the so called ‘jobs tax’ seems to contradict this policy, especially as they wish to pay for it by cutting waste. The Conservatives have set out plans to save an additional £12bn on top of the £15bn efficiency savings that Labour believe they can achieve this year, which to many seems extremely unrealistic.
Whilst the chancellors debate provided an opportunity to learn more about the potential Chancellors, what it didn’t tell us was how the future government of the UK will cut the budget deficit. The major parties must have plans afoot to bring in extra taxes and cut public sector spending. The only problem is, debate or no debate, we are going to have to wait until after May 6th to find out how the elephant will be banished.