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Manifestos promise much but tell you nothing

It is hard to see how Gordon Brown and Alistair Darling get to their pounds 15bn global costing of the Conservative Party Manifesto. Even factoring in pledges anticipated by Labour but not actually in the manifesto - such as outright abolition of capital gains and inheritance tax - the figure looks like an exaggeration. The City is right to take a relaxed view.

Furthermore, the manifesto as it stands offers few clues as to the effect of all those tax and spend commitments on the public finances. Whether the cost of the new transferable allowance is pounds 1.2bn (Conservative) or pounds 5bn (Labour), it matters not a jot to the overall shape of the public finances if offset by a corresponding tax rise elsewhere. And whether the 20p basic tax rate is an "aspiration" or a "commitment", its pounds 6bn cost could easily be absorbed simply by leaving allowances unchanged for a while. Clever things, manifestos. They promise much, but they tell you nothing about how the books are going to be balanced to pay for it all.

It will be Labour's turn today and the story is likely to be a similar one, only in rather more alarming form. There will be lots of commitments, Central Office will wildly exaggerate their likely cost, and the manifesto will say nothing about how they are to be paid for. The truth of the matter is that both parties - Conservative and Labour - are going to find it exceptionally hard to stick within present spending commitments, and that's without any of the new pledges contained in yesterday's Tory manifesto and the likely promises made in today's Labour manifesto.

Indeed public spending plans as laid down in last November's Red Book are already unrealistically tight. Despite the fact that both parties are committed to real increased spending on health, the Red Book envisages no real growth in each of the next two financial years in spending on the National Health Service. In reality, spending on the NHS will continue to rise in real terms, whatever the Government does to cap it. That extra spending is going to have to be paid for with deeper cuts elsewhere. Add in the new commitments now being entered into and if either party were as good as their word, then they would have to kiss goodbye to what remains of the road-building programme and a lot more besides.

Alternatively they could allow borrowing to rise above Maastricht limits or just raise taxes. Labour or Conservative, the latter is all too likely to be the option chosen.