Whether they are called manifestos or contracts, the documents published by political parties ahead of an election are rather less substantial than their many pages would suggest. They are full of best-case scenarios, undetailed proposals and dubious costings, and it is hard to picture the impact each party would have on the UK if they followed through with their pitches. So I’ve been feeding party literature into the political strategy video game Democracy 4, to see how these policies might play out. The results were … well, you’ll see.
Democracy 4 lets you play out your political fantasies (or nightmares) to see the impact of your choices and, ultimately, if you can get re-elected. Drawing from publicly available data, developer Positech Games has modelled various democratic nations, including the UK, with approximations of state and private institutions, government policies and taxes. Within this simulation live thousands of virtual voters. In the UK, most citizens count themselves as capitalists, but they may also be middle-income, wealthy or poor, farmers, commuters or self-employed. For each country, the makeup of the virtual citizenry differs: applying a CO2 emissions tax policy in the US, where many citizens care a lot about cars, will disappoint more voters than in Japan, where most people use public transport.
While Democracy 4 can’t possibly be a like-for-like simulation of the political circus in the UK in 2024 (frankly, what could?), it does allow us to play out each major party’s plans in broad strokes and see whom it benefits, whom it angers, and, most importantly, whether it achieves anything.
As Democracy 4 doesn’t model Scotland and Wales individually, it’s not possible to play out the specificity of the SNP and Plaid Cymru’s plans. I’ve focused on the Conservatives, Labour and the Liberal Democrats. For fairness, in each simulation, the party takes over on 5 July with a small, 10% majority, facing the same economic challenges. Can Labour solve underfunding in every area of society by growing the UK economy? Will the Conservatives’ plans to cut taxes stimulate business? And will the Liberal Democrats’ wealth taxes and investment in public services see the country’s debt deficit close?
The short answer to all of those questions is a resounding “no”, but how these failures play out really illustrate the scale of the challenge facing the party that takes over Westminster on 5 July.
The Conservatives, Labour and Liberal Democrats all put the economy front and centre, referencing the cost of living crisis and the state of the nation’s finances in the first paragraphs of their manifestos. It’s no surprise, as Tom Waters, associate director of the IFS, recently commented: “The UK has fallen from being one of the fastest growers prior to the Great Recession, to one of the weakest performers.”
Democracy 4 represents this stagnation with a situation called Uncompetitive Economy, which acts as a constant drain on the country’s gross domestic product (GDP) and the happiness of the UK’s capitalists (which, as mentioned, is most of the population). For the parties to solve the issue, their planned tax cuts, investments and new policies must create high-paying jobs.
A sluggish economy isn’t the only problem facing the UK’s next government; more than a decade of borrowing has left the nation with a giant pile of debt, and meeting the interest payments is absorbing a substantial chunk of the money made in tax revenue. That deficit needs to be brought down so that the population’s taxes can go towards public services. The Conservatives aim to reduce government debt and stimulate the economy by cutting taxes and spending. Labour hopes to grow out of the problem, deepening the pool from which it can draw tax revenue. The Liberal Democrats plan to raise taxes on the wealthiest earners.
At the start of each party’s term in parliament, I mirror the manifesto costings in tax cuts and spending increases as closely as possible. For the Conservative party, that means cutting national insurance contributions and civil service headcount across the state sector; for Labour, I implement tax policies that target the same people affected by the closure of non-dom loopholes and VAT on private schools; and for the Liberal Democrats, a major tax on banks, corporations, technology companies and the aviation industry coupled with massive investment in state health and welfare services.
All the parties rely on £5bn or more raised from cracking down on tax avoidance. While that seems like a policy that would hit onlynthe very wealthy, in reality, according to the IFS, it would hit taxpayers at every level. I recreated this with a tax that hit the Everybody demographic, and I can tell you, they weren’t thrilled about it.
Each turn in Democracy 4 advances the timeline by three months, and the parties’ policies have an immediate impact. Increased investment in the NHS and policing saw health levels rise and crime levels fall; all three parties also saw reduced poverty. Perhaps the good times are finally coming to the UK.
Next turn, alas, the bad times arrive. After its civil service cuts in prisons, the Conservatives became embroiled in a prison overcrowding crisis (right on schedule, if HM Prison and Probation Service officials are to be believed), and crime figures jumped back up. The Liberal Democrats saw GDP begin to plummet, causing international agencies to downgrade the country’s credit rating and increase the interest rate on its debt, and Labour saw an airline declare bankruptcy, hitting business confidence.
As the months passed, the other parties joined the Liberal Democrats in the CCC credit rating. Shortly afterwards, UK business proved just how flighty it can be. Advisers began to warn me of a brewing corporate exodus.
The corporate exodus situation triggers when when stability and productivity are low, taxes on business are high, or, in the Liberal Democrats’ case, both. Once it starts, GDP lowers, and capitalist voters become angry, compounding the UK’s already stretched finances.
In Democracy 4, at least, it appears big business is only ever a hair away from leaving the UK if its income is threatened. The dynamic sheds a little light on the Conservatives and Labour’s tax policies: to have a hope of bringing down the mountain of government debt, whoever comes to power can’t risk a single big business leaving the country and stepping out of the reach of HMRC. The country is only one misstep away from entering a downward economic spiral ending in a debt crisis.
Much of this election has focused on the parties’ economic plans, the focus of most of their new policies. Funding in other sectors, such as education, is staying broadly similar: Labour has pledged to recruit 6,500 new teachers, but, as the BBC’s Nick Robinson pointed out in his Panorama interview with Keir Starmer, that only amounts to one new teacher for every three schools.
Unfortunately, according to Democracy 4, maintaining the current standard of our schools creates further economic problems. Both the Conservatives and Labour faced a skills shortage situation because, despite creating high-skilled jobs through investment, the schools couldn’t produce students who could take advantage of them.
Thanks to significant investment in schools, the Liberal Democrats were the only party to improve education. But due to the tax they implemented on tech companies and businesses, the highly trained labour force had no high-skilled jobs to take up. The UK was in danger of becoming a technology backwater.
The result for every party was reduced GDP, increasing the debt deficit, downgrading the nation’s credit rating and triggering a corporate exodus. Democracy 4 may only be a sketch of the UK, but it highlights how tightly the country’s services are connected.
Ironically, the poor state of the economy and high levels of unemployment caused illegal immigration to go down for all three parties. Legal immigration, too. Emigration went up, though. Essentially, no one wanted to live in the UK.
At the end of each party’s five years in office, it wasn’t a pretty picture economically or electorally. Success on the economy for all three parties would see the government debt falling, income climbing, and the deficit shrinking. None of them managed it, though there was a least-bad performer. Under the Conservatives, the deficit grew by just over £7bn to £42.9bn, which sounds like a lot. However, under Labour, it more than doubled to £74.66bn – still peanuts compared with the Liberal Democrats, who saw it grow to £95.7bn.
All three parties were wiped out in the 2029 election. Labour came last with 13.6% of the vote, followed by the Conservatives with 14.6%. The Liberal Democrats, despite tanking the economy, secured 22.3% of the vote because, under their leadership, the country saw significant improvements in healthcare and education.
Democracy 4 is not a forecast of things to come. It is not possible to create a like-for-like version of every policy in the manifestos, nor accurately reflect the cuts and reorganisations the parties are proposing for each part of the public sector, nor how the governing party will respond to emerging challenges. All I did was run the numbers and watch things play out. But nonetheless, the game illustrates the scale of the UK’s problems and how significant a challenge it will be to cut, grow, or invest our way out of them. If you think you can do better than any of the major parties, why not give it a try?
