Faster growth under Labour and Lib Dems, says study

Posted On: 
9th February 2015

The economy would grow at a faster rate under Labour and Liberal Democrat deficit reduction plans than those put forward by the Conservatives, according to new research.  

A study by the National Institute for Economic and Social Research compares the implied 2017-19 fiscal plans of the three main parties with the think tank's own forecasts based on Coalition spending proposals.

The think tank finds that all three parties' proposals, if implemented, would see the economy grow at a faster rate than currently forecast using Coalition plans.

But it also finds that both Labour and the Lib Dems' plans would see GDP in 2017 grow at a rate of 0.3% above current forecasts, compared to  0.1% under the Conservatives' totals.

In 2018, the economy under Labour and Lib Dem plans would grow at a 0.2% faster rate than  current GDP estimates, compared to 0.1% under the Conservatives. In 2019, both Labour and Lib Dem plans would see GDP growth at 0.5% above current estimates, compared to a rate of 0.2% for the Tories.

The think tank concludes that there is "no difference between the stated fiscal targets of the Labour and Liberal Democrat parties by the end of the next parliament" and uses identical scenarios for both. 

It also runs a second scenario for the Conservatives which factors in additional cuts to the welfare budget. This exercise results in stronger growth rates in both 2017 and 2019.

See
the full analysis at the NIESRhere.