Wed, 18 May 2022

Newsletter sign-up

Subscribe now
The House Live All
Economy
Press releases

Labour's claim it would save families £7000 a year 'not credible', say experts

Labour's claim it would save families £7000 a year 'not credible', say experts
3 min read

Labour claims that it would save families nearly £7,000 a year if the party wins the election have been dismissed as "not credible" by experts.


Shadow Chancellor John McDonnell said his party's plans for a massive boost in public spending would lead to a reduction in household bills.

​Speaking in Birmingham on Wednesday, Mr McDonnell vowed to "abolish poverty" within five years if his party wins a Commons majority on 12 December, with families due to save an average of £6,700 each year.

Alongside the party's nationalisation agenda, the top Labour figure said plans to provide free childcare would bring an average saving of around £3000 per child, whilst free school meals, an end to prescription charges and provision of free social care would deliver further savings.

Mr McDonnell said: "This is not about Father Christmas or make-believe...it's about hard-nosed policy making."

But the plans have come under scrutiny from Paul Johnson, director of the Institute for Fiscal Studies, who said the chances of any family fully benefiting from the policies were "remote".

“Those currently paying for childcare who get more free childcare will benefit significantly, for example,” he said.

“Though remember, someone in the end has to pay. You can force rail, water and energy companies to charge less, though again someone has to pay (and you risk damaging those industries).

“The chances of any family benefiting by the full amount Labour claims are remote. Certainly their figures shouldn’t be taken as in any sense average or typical. 

“And to labour the point to the extent that some people get more things free or cheaper, other people will be paying through higher taxes.”

Meanwhile, independent charity Full Fact, who provide analysis of claims made by all of the mainstream parties, said the plans were "not credible".

"Very few of these figures represent what 'average families' will save under Labour’s policies, or how much more those families have had to pay under the Conservatives," they said.

"More than three quarters of the supposed “savings” come from just two large costs, rail season tickets and childcare, neither of which comes close to reflecting what an average family actually pays. 

"In England, two fifths of families don’t pay anything for childcare; only 5% of people use a train more than three times a week."

The group said the party had made "fair estimates" about some of the smaller savings outlined in the plan, but claimed Mr McDonnell had "overstated" how much extra families were paying since 2010.

Conservative Treasury minister Rishi Sunak, added: "It defies believe that Corbyn's Labour are claiming they would reduce living costs at the same time as standing on a manifesto containing tax rises which would hit ordinary hardworking people across the country."

PoliticsHome Newsletters

PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe

Podcast
Engineering a Better World

The Engineering a Better World podcast series from The House magazine and the IET is back for series two! New host Jonn Elledge discusses with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

NEW SERIES - Listen now