Labour and Tories ‘not being honest’ about tax and spend plans

The Conservatives and Labour have been accused of hiding their tax and spending plans from voters as the two parties traded a pre-election war of words.

Jeremy Hunt accused Labour of needing to raise an extra £10bn a year to pay for its spending promises if it gets into power, a claim which the Opposition insists is untrue.

The Chancellor was criticised for the way he had worked out the calculations, which were made by Treasury officials but on the basis of assumptions drawn up by Conservative advisers.

Labour also accused him of having his own £40bn hole in his plans because he has promised to abolish national insurance for workers without explaining how he would replace the revenue.

But Paul Johnson of the Institute for Fiscal Studies warned that the figures at stake were relatively insignificant compared to the need to find significant savings next year in order to balance the books without additional tax or borrowing.

Mr Hunt has previously outlined plans to restrict the future increase in public spending, which the Resolution Foundation estimates will require £19bn in cuts to Whitehall departments other than those which are protected such as Health and Defence which are already guaranteed to increase.

Mr Johnson told i: “What is frustrating is that neither (party) has told us anything, essentially, about how they are going to divvy up the very limited cash they’ve got from 2025 onwards.”

He pointed out that the Chancellor had announced in the Budget that the next spending review – outlining where cuts will take place – would be delayed until after the election.

He continued: “The numbers he has pencilled in, the reason he’s not going to tell us is he would have to tell us where the cuts are going to fall, and he won’t do that – and nor will Labour, because they’re not saying whether they going to have more money to spend, and if they’re not going to have more money to spend they’re going to have to face the same incredibly tough choices that Hunt is avoiding.”

Speaking to Times Radio Mr Johnson said:: “I think the overall problem here is that neither side is being in the least bit honest about the really hard decisions that are going to have to be taken after the next election.”

Mr Hunt confirmed in a speech on Friday that he was still hoping to cut national insurance once more before the general election. He said: “If we can afford to go further responsibly to reduce the double tax on work this autumn that is what I will do.”

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The Chancellor added: “My commitment is that the tax burden will go down under a future Conservative government.”

He hit out at Labour’s claim that he can only abolish employee national insurance contributions by cutting pensions or NHS funding, saying: “Frankly it is a lie. I don’t make any bones about it. It is fake news and it is an absolute disgrace to try and win this election by scaring pensioners about a policy that is not true.”

Ministers and their aides have commissioned civil servants over recent months to put together “costings” of Labour plans, based on public statements by the Opposition on the tax and spending policies they would introduce in government.

Mr Hunt claimed the dossier showed Labour would need to raise an extra £10bn a year by 2029, but shadow ministers insisted the calculations were based on incorrect assumptions and contained a number of factual errors.

Tim Leunig, a former adviser to Rishi Sunak in the Treasury who is now consulting director of economics at Public First, said: “Jeremy Hunt has shown two things today. First that Labour will have to make tough decisions in office. They know that. Second, that he is willing to use taxpayers’ money to create poorly evidenced pot shots at the opposition. There are far more black holes in his claims that in Labour’s proposals.”

He pointed to a number of specific issues with the document, including the claim that sending military support to Ukraine would require extra funding rather than drawing on the Ministry of Defence’s existing budget, and that new regional teams within the schools regulator Ofsted would cost additional revenue.

A Labour spokesperson said: “This is another desperate attempt by the Tories to deflect from their £46bn unfunded tax plan that will lead to higher borrowing, higher taxes on pensioners or the end of the state pension as we know it.

“All of Labour’s policies are fully costed and fully funded. Unlike the Conservatives who crashed the economy, Labour will never play fast and loose with the public finances.”