Fri, 24 May 2024

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The House Live All
By Lord Watson of Wyre Forest
Press releases

Fresh spending row as Tories claim Labour spending plans will land voters with £2,400 tax bill

2 min read

A fresh election row has erupted as the Conservatives claimed a Labour government would see workers cough up an extra £2,400 in taxes every year because of a "black hole" in the party's spending plans.

In figures which have been dismissed outright by Labour, the Tories said a Jeremy Corbyn administration would leave a £374bn gap in the public finances.

Chancellor Sajid Javid claimed that Labour would have to "hike up taxes" to pay for their plans to "massive increase borrowing and debt".

The latest Conservative estimate repeats the party's previously-disputed claim that Labour would spend £1.2tn over the next five years.

It assumes the party would allocate £651bn of this to day-to-day government spending.

But the Tories argue that on current tax levels and with Labour's own borrowing rules, the party could only raise £277bn - leaving a shortfall of £374bn. 

The party has then divided that £374bn by the total 31,199,000 taxpayers in the UK to put a cost of £12,000 per person over five years to close the gap - working out at £2,400 a year.

Mr Javid said: "Jeremy Corbyn is planning a reckless spending spree which we will all have to pay for. He will open up a huge black hole in the nation’s finances and hard working people will be the ones that suffer.

"In order to pay for his policies, he will not only have to massively increase borrowing and debt, he will also need to hike up taxes by £2,400 per person – this is equivalent to an entire month’s pay for the average earner."

But Shadow Treasury minister Jonathan Reynolds hit back: "This is more fake news from Conservative HQ after Sajid Javid had his plan to use the civil service for party political ends scuppered.

"Labour will set out our plans and our costings fully when we release our manifesto.

"The Conservatives should spend more time costing their own policies as they failed to produce costings at the last election and - as Kwasi Kwarteng demonstrated - have no idea about the cost of their own policies."

The latest claim follows a bitter row at the weekend over the Tories' £1.2tn figure, which Shadow Chancellor John McDonnell described as a "mish-mash of debunked estimates and bad maths cooked up because they know Labour’s plans for real change are popular".

Both parties are promising to boost public spending heading into the 12 December election, with Mr Javid last week promising to unlock "billions of pounds more to spend on the infrastructure revolution this country needs" by shelving limits imposed by his predecessor Philip Hammond.

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