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General election 2019: Spending row erupts between Labour and Conservatives

This would amount to an extra £650m a day in office, the Chancellor Sajid Javid said, warning against such 'reckless' spending which would leave the country with an economic crisis within 'months' and require taxes set at the 'highest level we've ever seen in peacetime'.

Article originally published by The Week. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

Tories cost Labour’s policies at £1.2trillion, but fail to offer equivalent figure for own spending plans

The analysis, drawn up by the Conservative Research Department and not the Treasury after the cabinet secretary barred the release of official government assessments, claims Labour’s policies would cost £1.2tn over the course of the next five years, if the party wins next month’s general election.

This would amount to an extra £650m a day in office, the Chancellor Sajid Javid said, warning against such “reckless” spending which would leave the country with an economic crisis within “months” and require taxes set at the “highest level we’ve ever seen in peacetime”.

He told the BBC’s Andrew Marr Labour’s plans to renationalise rail, energy and water, and bring in a four-day-week represented a “truly frightening spending splurge” that would leave the country on “the brink of bankruptcy”.

The Daily Telegraph says the move “comes as part of a drive by the Conservatives to portray themselves as the ‘sensible’ party on the economy, with their spending plans focused on ‘responsible investment’ rather than ‘reckless borrowing’”.

“Javid’s attempt at a clear ‘fiscal divide’ with Labour suggests that he has won his struggle with Dominic Cummings, the prime minister’s most senior aide, who had wanted more spending to win over Labour leave voters in the north of England and in Wales,” says The Sunday Times.

However, The Guardian says the analysis, which was “briefed to sympathetic newspapers” on Sunday, was quickly “debunked by the opposition and commentators”.

The paper says the figure “includes motions passed at the Labour conference, unlikely to be included in the party’s election manifesto, which has yet to be published”.

The shadow chancellor John McDonnell called the document a “ludicrous piece of Tory fake news”  and said their analysis was “bad maths” cooked up because they know the popularity of Labour’s plans.

Meanwhile, Labour’s Co-National Campaign Coordinator Andrew Gwynne called the analysis “fiction”, promising the party’s manifesto would be fully costed.

“There are problems with the Conservative Party's approach” says the BBC’s Reality Check.

“As Labour has not yet published its election manifesto, previous pledges may well be dropped, while new ones could still be added. That makes the job of accurately costing election pledges, at this stage of the campaign, impossible.”

Some policies, such as free bus travel for under-25s, which the Tories state would cost £7bn over five years, or the £30bn cost for improving home insulation, “are relatively straightforward to price,” says the Financial Times.

“But other claims are less certain,” says the paper. “The £4.5bn cost for a universal basic income does not take account that Labour has only pledged to pilot the scheme. The £200bn cost for renationalisation may also be an overstatement, as Labour has suggested it would not pay market rates. The 32-hour working week, costed at £85bn, is not a compulsory proposal and would be implemented over a decade”.

The Sunday Times says the Tories also “assume that spending on some plans, such as Labour’s four-day-week proposals, will start on the first day the party enters Downing Street”.

What is more, Politico says Tory ministers “had little in the way of answers to the inevitable questions about their own spending plans”.

Asked by Sky’s Sophy Ridge what the Conservatives’ equivalent spending figure was to the one they had calculated for Labour, Brexit minister Kwasi Kwarteng said he was “not going to bandy around figures” to which Ridge replied “but that’s what you’ve been doing for Labour”.

Similarly, Sajid Javid refused to be drawn on whether Boris Johnson’s expensive tax cut for higher earners he first unveiled during the Tory leadership campaign would make it into the manifesto.

The party will nevertheless be pleased its analysis appears to have cut through after dominating the front pages of Sunday’s newspapers, with the Mail on Sunday, the Sunday Times, and Sunday Telegraph all leading with it.

But the strategy is not without risks, says the FT, as a sustained debate on the economy “may also remind voters of how much Corbyn would like to invest in public services”.

According to a YouGov survey, public confidence in the Conservatives’ ability to deliver growth is higher than Labour’s but still low, “suggesting Boris Johnson faces a battle to win over voters on the economy,” says the Sunday Times.


This article was from The Week and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Article originally published by The Week. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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