FactCheck checks it out
FactCheck thought we had a hard day yesterday working on the Labour Manifesto but when 120 pages of the Conservative manifesto dropped in our inboxes we stopped what we were doing and got to work.
The analysis
“And we will raise the inheritance tax threshold to £1m to help millions of people who aspire to pass something on to their children, paid for by a simple flat-rate levy on all non-domiciled individuals.”
Millions of people may well aspire to pass riches on to their children – but how many of them would actually be helped by the Tories’ policy to raise the inheritance tax threshold to £1m?
The Treasury estimates a grand total of 11,000 estates would benefit from the increased threshold – 8,000 of them worth up to £1m and 3,000 worth over £1m.
So far short of the millions the Tories suggest. But how about whether the cost of the tax relief will be covered by a simple flat-rate tax on non-doms?
Labour claims the Tories’ new tax on these wealthy people with links abroad won’t bring in the required amount of cash. The most recent information we’ve FactChecked suggested Labour might be on the right lines – but frankly there is so much uncertainty around the tax that we just can’t say whose sums add up.
Update: In response, a Conservative party spokesman directed us towards a letter written by the Shadow chief secretary to the Treasury, Philip Hammond, last December (for more read here).
“Under Labour, youth unemployment has reached over 900,000, with one in five young people unable to find a job.”
The latest statistical summary from the ONS headlines youth unemployment as that affecting 18-24 year-olds, of whom there are 715,000. However, if you look at the figure for 16-24-year-olds (and there’s no reason why you shouldn’t) it’s 200,000 higher, backing up the Tories’ claim.
But, but, but. Contained within the 915,000 young unemployed are more than a quarter of a million full-time students. They’re included on this measure of unemployment because they are actively looking for, but say they haven’t been able to find, work. If they were excluded, the 16-24-year-old unemployed total would instead be 653,000.
Nothing wrong with the Tories quoting the higher figure. But when you think of young people languishing without work, a student who can’t find a part-time job isn’t perhaps what you’d have in mind.
It’s also worth remembering – as the Conservatives yesterday promoted a poster with a picture of Gordon Brown saying “I caused record youth unemployment” at Labour’s manifesto launch – that comparable youth unemployment figures only go back to 1992. So although the high youth jobless tally is nothing for Labour to be proud of, the “record” excludes much of the recession counts under the last Tory administration.
“Recorded violent crime against the person has risen sharply under Labour”
The two main sets of violent crime statistics show completely opposite trends.
In the blue corner, recorded crime figures – which are affected by changes in the way crimes are counted by the police – do show a rise. But in the red corner, the British Crime Survey, which asks people about their experiences of crime, shows violent offences have in fact decreased by more than 40 per cent.
This is politics, you can’t really blame the Tories from only quoting the statistics that are most useful to them…except they’ve been, specifically, warned not to by the head of the UK Statistics Authority.
The stats watchdog has set out clearly that it believes the British Crime Survey is the best measure of long-term trends in violent crime. “We regard a comparison, without qualification, of police recorded statistics between the late 1990s and 2008/09 as likely to mislead the public,” Sir Michael Scholar wrote to Shadow Home Secretary Chris Grayling earlier this year, after he made similar claims based on recorded violent crime figures.
“We will act immediately to cut government waste so we can stop the most damaging part of the National Insurance rise for employers and for anyone earning under £35,000.”
As you might expect, the first section of the Tory manifesto repeats many of those arguments for cutting waste to fund the National Insurance rise that have been filling newspapers for the last couple of weeks.
The Tories believe that they can cut an extra £12bn in this financial year, £6bn of which will go to pay down the bulging UK deficit, they say. These cuts, and more which they will find when in government, will also fund their pledge to block the planned rise in national insurance next year.
Not possible, say Labour, who refer to £15bn efficiency savings they’ve already put in motion for this year, adding that it is not credible that the Tories could increase this to £27bn.
Oh yes it is, say the Conservatives – two government efficiency gurus’ say we can. But the details of exactly where these savings will come from are scarce, although some are emerging slowly. And, as the Institute for Fiscal Studies pointed out when the government mentioned efficiencies in the budget, they can be elusive and difficult to measure.
So in the end it is almost impossible for us to really judge whether the Conservative targets are possible, whether cuts will be more painful or whether they leave the party with a big black hole when it comes to funding that NI pledge until there is more detail.
And, as the IFS concluded on the policy before: “The Conservatives claim that the spending cuts can, in effect, be rendered painless by efficiency savings that they say their advisers have identified. Whether or not that is true, using the bulk of these spending cuts to finance the NI cut means that they are not available to contribute to the task of reducing government borrowing that the Conservatives have set such store by.”
“We will implement the Prisoners Earnings Act 1996 to allow deductions from the earnings of prisoners in properly paid work to be paid into the victims fund. We will use this fund to deliver up to 15 new rape crisis centres and give existing rape crisis centres stable, long-term funding.”
The act was introduced back in John Major’s time, to allow prisons to take things like income tax and national insurance from money earned by prisoners.
However, it was never put into force – because the government reckoned that, far from raising enough cash to fund rape crisis centres, it would end up costing more money overall.
“The act is complicated and prescriptive and it is calculated that in its present form it would cost substantially more to administer than it would raise in revenue,” parliament was told last time the Conservatives tabled a question on it, in 2008.
The Prison Service told a Scottish parliamentary committee in 2004 that, despite a lot of effort on its part, “contracts for work, which would pay the revenue necessary to support the scheme, have not been easy to obtain”.
The Conservatives point out that the rape crisis funding pledge relates to a wider victims’ fund, which would include money already being raised from fines, as well as money from the Prisoners’ Earnings Act. But would it raise extra money?
The Tories think so – they gave us two examples of successful prison work projects and dismissed the suggestion the act was complicated and prescriptive as “an excuse for inaction by ministers who were unwilling to bring this legislation, passed by the last Conservative government shortly before the 1997 election, into force”.
“Thirteen years ago, Britain’s tax system was one of the most competitive in the developed world. Over the last decade, other countries have cut their tax rates while our tax system has become one of the most complex in the world. Our competitiveness rating has fallen, while the burden of regulation and the impact of taxation have risen.”
These claims put together paint a bleak picture of the attraction of the UK to the corporate world, but they may not paint the whole picture.
It is true that the United Kingdom’s competitiveness rating has slipped from 7th to 13th out of 133 over the last 13 years, according to the World Economic Forum’s Global Competitiveness Report.
But the UK is still above France (16) and Italy (48) from the G7 and above all the remaining G20 countries outside the G7 including China (29), India (49) and Australia (15).
It is also true to say that, according to KPMG’s Global Corporate and Indirect Tax Rate Survey the UK had the 11th lowest corporation tax in 1997, but is the 23rd lowest in 2009.
And it is true that other countries have cut their corporation tax, with four of the seven countries that jumped ahead of the UK in the competitiveness ratings cutting by more than 9 per cent.
But Britain has also cut its corporation tax rate by three per cent since 1999. This may not seem a lot compared to a 28 per cent fall in Germany, but their corporation tax rates started so much higher that in 2009 it was still just above ours at 29.44 per cent.
As a sample, of the 12 countries above the UK in the competitiveness ranking the Conservatives quote, seven of the 12 cut their interest rates by more than the UK, six of the 12 had higher corporation taxes in 1997 and four of them still do.
“One in six children in the UK now lives in a workless household – the highest proportion of any country in Europe.”
True, according to European statistics. The latest figures available are for 2008 and show that 16.4 per cent of children in the UK live in a workless household, the highest figure in Europe.
But this figure has fallen from 18.9 per cent in 1997, or one in five children. And, as FactCheck found in 2007, this does not take into account the social differences such as the number of lone parent families in the UK, which the Office for National Statistics calculated to be 12 per cent of UK households in 2009.
“Despite three White Papers, a multitude of strategies and endless new announcements, the UK now gets more of its energy from fossil fuels than it did in 1997.”
The most up to date figures showing our fossil fuel reliance are for 2008, and they don’t include shipping or aviation .
While the amount of energy generated by renewable sources has risen from 2.3914MWe (megawatt electrical) in 1997 to 6.8031MWe in 1998, it is dwarfed by the continuing rise in our use of fossil fuels.
As a result, our fossil fuel dependency has risen from 88.3 per cent in 1997 to 91.5 per cent in 2008.
“We have the worst record of any major EU nation when it comes to renewable energy.”
The UK was at the bottom of the EU league table for renewables in 2005, ahead of only Malta and Luxembourg, according to the European Wind Energy Association.
The table published last month says that back in 2005, renewable energy made up only 1.3 per cent compared with top performer Sweden, which generates nearly two fifths of its energy from renewable sources. But the same table backs the UK to reach its target of generating 15 per cent of renewable energy by 2020, unlike stronger performers including Denmark and Italy.
It is worth remembering that the 1.3 per cent figure is five years old and the 2008 results show improvement with 2.4 per cent of energy coming from renewables. Environmentalists suspect that the figures for 2009 and 2010 may show more dramatic progress towards the 15 per cent target. However no EU wide figures for 2008 or later are available for comparison.
The verdict
There is more than one way to skin a cat, so the saying goes. Equally, there is more than one way to read a set of statistics.
As you may expect, the Tories have used those statistics to their advantage but they really shouldn’t be repeating the crime stats after their ticking off by the Statistics Authority. And while millions may aspire to pass something on to their kids, at the moment, very few will actually be able to do so.
But, in other areas – like renewables and fossil fuels – they’ve been spot on.
