Do voters have a real fiscal choice this time?

The release of party manifestos this week highlighted that, unlike in recent elections, the two main parties offer voters a real fiscal choice this time. Labour would borrow significantly more than the Conservatives over the next five years to invest in infrastructure, compared to the “phoney debate” over borrowing differences of around £6bn per annum in 2010. And this would result in fiscal policy exerting less of a drag on GDP growth over the coming years. Admittedly, the gap in the plans could be narrowed due the Conservatives’ unfunded commitments to raise the personal allowance and higher-rate income tax threshold and bring net migration down below 100,000. However, if this was the case, then the Conservatives would need to implement further austerity beyond 2021-22 to bring borrowing down and meet to meet their fiscal goal.