The complete series of Election Analyses from the Centre for Economic Performance (CEP) is now available, summarising research evidence on some of the key policy battlegrounds of the 2010 UK General Election.
The following summary draws out some key facts across all the Election Analyses. The complete CEP Election Analysis 2010 series is available here: http://cep.lse.ac.uk/, and in one entire booklet for download, here: http://cep.lse.ac.uk/pubs/download/CEP_ElectionAnalysis_2010.pdf
- DEBT AND DEFICITS: The greatest challenge facing the next government is how to reduce the budget deficit and stabilise net public debt, which currently stands at £890 billion (£14,500 per person). No party has outlined more than £10 billion of spending cuts when cuts of £37 billion will be needed by 2014 to halve the deficit.
- GETTING AND SPENDING: Before the recession, Labour increased taxes (by 2.3 per cent of GDP between 1997 and 2007) and spending (by 1.2 per cent of GDP). The higher spending on police, education and hospitals has reduced crime and improved schools and healthcare – but public sector productivity has fallen.
- FINANCIAL REGULATION: The roots of the global crisis lie in the financial sector where governments were forced to bail out banks deemed ‘too big to fail’. Bankruptcy risk must be made credible by reducing the systemic risk of large banks, for example, through steeply progressive taxes on bank size.
- INEQUALITY: Global forces such as technological change have pushed up inequality pressures. Labour’s policies have constrained the growth of inequality, but not reduced its level. The richest 10 per cent have increased their share of income by £20 billion since 1998 – largely because of bankers’ bonuses.
- JOBS: Since the recession began, unemployment has risen from 5 per cent to 8 per cent – far less than expected given the huge fall in GDP (over 6 per cent). Unemployment rose faster for youths than adults, but this always happens in recessions. Although the New Deal has helped to contain unemployment, youth joblessness started rising from 2004 – four years before the recession began.
- EDUCATION: A pupil premium for disadvantaged pupils would help raise standards. City academies and Swedish-style ‘free schools’ are unlikely to raise overall school performance.
- HEALTH: Since 1997, huge increases in NHS spending have helped reduce the inequality of health outcomes by social class. Reforms that increased competition improved hospital quality.
- CRIME: Crime has fallen since 1997, although 75 per cent of people think it is rising. More police and targeting prolific offenders have helped reduce crime, as have improved opportunities at the lower end of the labour market.
- IMMIGRATION: The proportion of immigrants of working age rose from 8 per cent in 1995 to 14 per cent by 2009. Immigrants are less likely to be in social housing than the UK-born and are, on average, younger and better educated.
- URBAN RENEWAL: There is no convincing evidence that area-based initiatives, such as the New Deal for Communities, have reduced differences between rich and poor areas.
- ENVIRONMENT: In line with the Kyoto protocol, compared with 1990, UK emissions have been reduced by more than 12.5 per cent since 1990. But the UK has failed to meet its own target of a 20 per cent cut by 2010. To meet the targets efficiently, carbon prices must rise.