Labour accuses Tories of planning unfunded tax cuts | EUROtoday

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By Henry Zeffman, @hzeffman, Chief Political Correspondent
Reuters Jeremy HuntReuters

Labour has accused the Conservatives of proposing unfunded tax cuts after Jeremy Hunt urged key manifesto guarantees on welfare cuts had already been introduced.

The Conservative manifesto is funded largely by proposed cuts to spending on advantages, which the celebration says usually are not presently authorities coverage.

But the chancellor wrote in a e-newsletter to constituents final week that the tax cuts within the Conservative manifesto can be funded by financial savings from “an enormous back to work programme (which I announced in the Autumn Statement last year)”.

Labour seized on his feedback as proof that the welfare cuts “are not new” and “the money has been spent”.

The Conservatives stated Labour had been in “complete denial” in regards to the rise in the advantages invoice and insisted that the financial savings they intend to make use of to fund tax cuts will come from new insurance policies.

Government spending on well being and disability-related advantages has risen by £20bn in actual phrases since 2019, and an extra £11bn improve is forecast over the following 5 years, making this a big coverage problem for whichever celebration wins the overall election.

It is very essential for the Conservative Party as a result of they’ve stated they’d lower £12bn a 12 months in authorities spending on advantages in comparison with forecast ranges by 2029.

Those financial savings make up round two-thirds of the cash getting used to fund manifesto pledges on tax cuts and elevated defence spending.

But if the insurance policies are already factored into authorities plans, as Labour declare, then the financial savings can be a lot smaller and unable to fund tax cuts.

Mr Hunt, who has acknowledged he faces a troublesome battle to win his constituency of Godalming and Ash on 4 July, writes a e-newsletter for constituents twice per week.

At the beginning of the marketing campaign he advised recipients: “I write them myself so what you read will be my own views.”

Text from Jeremy Hunt's newsletter

Mr Hunt writes a regular newsletter for constituents

In an edition on Thursday, two days after Rishi Sunak had launched the Conservative manifesto, the chancellor wrote: “Our biggest problem (economically) is that post-pandemic we have too many people out of work on benefits when it would be much better for them, for the economy and for taxpayers if they were back in work.

“So we are funding an enormous back to work programme (which I announced in the Autumn Statement last year).”

He continued that if the Conservatives won the election they would be “using the savings” to fund a 2p lower to nationwide insurance coverage for employees and the abolition of nationwide insurance coverage for the self-employed, the flagship measures in Mr Sunak’s manifesto.

Labour argue that this passage is successfully an admission from Mr Hunt that components of the Conservatives’ plans are already authorities coverage, that means that they’ve already been factored into authorities budgets and spending plans.

They say which means that the financial savings can be decrease than £12bn and that in consequence the tax cuts are “unfunded”.

Darren Jones, the shadow chief secretary to the Treasury, stated: “This private admission from Jeremy Hunt that the Conservatives’ welfare cuts are not new, the money has been spent, and their plans are therefore unfunded drives a coach and horses through his party’s manifesto, which is no longer worth the paper it is written on.

“Rishi Sunak lied about Labour’s plans and we now have the evidence he is lying about his own – from his Chancellor.

“It’s time Sunak ‘fessed up and admitted his manifesto is a desperate wish list of unfunded promises that risks crashing the economy”.

The Conservatives insist their measures to reduce welfare spending have been announced since Mr Hunt’s autumn statement, which was in November last year, or will be announced in the future.

Their claims about welfare savings have also been questioned by the independent Institute for Fiscal Studies (IFS) think tank, who said that it was “far from clear” that the they could save the required amount.

The IFS said that was because “many of the policies that they plan to set out in their manifesto were previously announced by the government and have therefore already been incorporated” into government budgets.

Much of the Conservatives’ drive for savings from the welfare bill would come from halting the surge in claims for disability benefits, primarily the Personal Independence Payment (PIP).

The number of claimants has risen from 2.3 million people in 2019 to 3.6 million now and is forecast to rise to 4.6 million within five years of the election.

The government launched a consultation on ways to reform PIP in April.

The Conservative campaign points to a further suite of measures that were all announced after Mr Hunt’s Autumn Statement, such as increased mental health support, a call for evidence on reforms to fit notes, faster rollout of universal credit, and tougher powers to remove benefits from people who refuse work.

Paul Johnson, the IFS’s director, has said that the cuts in spending required by the Conservatives’ plans “would not be easy and would need definite, clear policies that require difficult decisions” and have not yet been announced.

However, he added: “I was equally sceptical about promises of delivering £12bn of welfare savings in the 2015 manifesto.

“Via some severe cuts, together with 4 years of freezes, these financial savings had been broadly delivered, albeit two years later than that manifesto had claimed.”

A Conservative spokesman said: “Unless action is taken, the working-age welfare bill will rise by more than £20bn a year by the end of the decade.

“Labour is in full denial about this and don’t assume it’s potential to avoid wasting a single penny from this unsustainable rise.

“We don’t assume that’s proper, which is why we have now set out how we’d save £12bn from the welfare invoice by the top of the following parliament, together with by controlling spending on well being and incapacity advantages and taking individuals’s advantages away after 12 months in the event that they don’t settle for a job.”

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