Sir Keir Starmer has promised low taxes and economic stability to voters, in his latest effort to show the Labour Party has changed from its time under his predecessor, Jeremy Corbyn.
The leader of the opposition this week listed “economic stability” as the first of his six pledges, vowing “to keep inflation, taxes, and mortgages low”.
However the Treasury has run its rule over his calculations and found them wanting: the spending plans outweigh tax increase by up to £10bn per year, or £38bn over four years.
Jeremy Hunt, the Chancellor, says this threatens extra tax rises to raise almost £2,100 per working household over the four-year period.
“If they get into power, Treasury officials will look at what they have said, just as we have done, and they will come to these same costings,” he said.
“It is going to be the same people who are advising them, and they will say, how are you going to fill this black hole?”
Labour described the report as full of “glaring mistakes,” including that “assumptions from special advisors” - political appointees - have been used, “rather than an impartial Civil Service assessment”.
Here is the Treasury’s breakdown of Labour’s plans:
First, officials set out how much money Labour’s plans set out to date would either raise in new tax revenues, or save in spending cuts.
The biggest item is narrowing the “tax gap”, the hole between the amount of money HMRC expects to bring in and what it actually receives.
A perennial favourite of hard-pressed ministers, Labour hopes to rake in £5bn by beefing up compliance. The Treasury thinks it would raise a more modest £3.9bn per year.
Hammering energy companies with a tougher levy would bring in the next-largest sum. Ramping the Conservatives’ windfall tax - officially known as the Energy Profits Levy - up to 78pc at the same time as scrapping allowances would bring in £1.3bn per year, the Treasury estimates.
Next come schools. Adding VAT, at 20pc, to private school fees raises an estimated £1bn per year, with business rates adding another £120m.
There is significant uncertainty around the numbers. Depending on how many pupils leave private schools, the VAT raid may raise £700m, not £1bn, for instance.
Added to a range of smaller measures, including halving spending on consultants and taking more from non-doms, the Treasury says that by 2028-29, Labour’s plans will raise £6.2bn per year.
Over four years, that amounts to a significant haul of just over £20bn.
Then come the spending plans.
Health
Labour has made no secret of its desire to bash Conservative management of the NHS, despite significant extra spending on the health service in recent years.
The opposition party has proposed a range of targeted measures which it thinks will help.
Each individually might be hard to object to, but the costs quickly add up.
Doubling the number of NHS scanners, for instance, would “arm the NHS with the cutting-edge kit it needs to cut waiting lists and get patients treated on time again,” said Wes Streeting, the shadow health secretary, last year.
He said this would “catch illness much earlier and treat it faster, which is better for patients and less expensive for taxpayers.”
The Treasury says the measure would cost up to £1.9bn per year.
Other policy price tags include £950m annually to bring back the family doctor, and almost £1bn for an extra 2m NHS appointments per year.
Combined, the measures costed amount to as much as £4.5bn per year.
Education
Sir Keir’s plans for schools and skills also add up quickly.
The most expensive policy is “fully-funded free breakfast clubs in every primary school.”
Bridget Phillipson, shadow education secretary, has said the breakfast clubs would help get more children to come into schools, and to stay there.
The Treasury estimates that, if half of pupils use the scheme, the cost would start at £468m next year then rapidly mount to more than £1.5bn in 2028-29.
The next-biggest item is putting mental health support workers in schools, particularly for children who have been excluded from lessons.
This is costed at up to £671m per year.
Labour is sceptical of the sums on mental health.
“The document acknowledges they have not costed the actual policy that sits behind our commitment,” the Party says, noting the Treasury’s concession that “there are alternative models to deliver this commitment, such as expanding the provision of counselling support in schools, which have not been costed here.”
In total, the education policies will cost around £2.3bn per year, the Treasury estimates.
Services
From bus timetables to police staffing, Labour has a range of other - expensive - policies on public services.
Overhauling local transport, giving local authorities powers to franchise bus services and reinstate cancelled routes, would cost almost £900m per year, the Treasury says. However, it acknowledges that the preponderance of “commercially sensitive” data in the industry means there is “a high risk of error” in the forecast.
Meanwhile deploying an extra 13,000 police and support officers is estimated at just shy of half a billion pounds annually.
Green Prosperity Plan
Sir Keir has made something of a rod for his own back with his plans for gigantic eco-friendly investments. Supposed to show a commitment to both the environment and the creation of jobs, his heavy spending plans have instead bumped up against the shortage of Government cash.
Labour has promised to stick to tight borrowing limits, so has already had to slash his 2021 pledge to spend £28bn per year on the green investment.
In February this became a promise to put in just under £24bn over the five years of the next parliament as a whole.
The Treasury prices this evenly at £4.7bn every year.
Total
Adding all of this to an extra £500m per year in support for Ukraine, the Treasury tots up total spending at up to £16.2bn per year.
Over the four years of its calculations, this amounts to £58.9bn of spending promises, versus £20.4bn of tax rises and savings.
The Chancellor argues this leaves Labour with “a black hole of over £10bn a year by 2028-29 or nearly £38.5bn over the next four years.”
Hunt’s speech was billed as a chance to set out dividing lines between the Conservatives and Labour. It looks more like battle lines.
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