Labour and Tories spar over tax plan - but who is right?
The Conservative party says Labour has a 拢45bn black hole in its plan. We look at the numbers and see who's right.
Wednesday 3 May 2017 16:48, UK
Do the bombshell figures add up or blow up?
Two senior conservatives and delivered soundbites today.
It could have been any election from the last 20 years. If the cliche wasn't enough, they also produced a dossier with figures about Labour spending.
Their calculations suggest Labour has a £45bn black hole in its plans.
Chancellor Philip Hammond announced: "Britain simply cannot take the risk of Jeremy Corbyn in Downing Street unleashing economic chaos on the country."
But just before the news conference got under way another blue document was circulated. This wasn't Tory literature. A Labour spy had infiltrated the room.
This dossier was titled: "Mistakes, Misinformation and Misrepresentation: The Tories false claims about Labour's plans."
This, as the title suggests, rebuts the claims made by the Conservatives. So who is right?
Well, it's a bit of both.
The first point to make is that the Conservatives point to more than 20 revisions to welfare and increased spending commitments - but Labour's document only rebuts 10 of them.
So, for example, plans to cut the so-called "bedroom tax" which would cost £560m - it's not clear how that will be paid for yet.
Mr Corbyn has called for the removal of the benefit cap. This would cost £490m and as yet Labour has not set out the counter measures to cover this.
One of the bigger ones is scrapping tuition fees which is something that was part of Mr Corbyn's leadership election campaign. It's estimated this could cost £7.1bn and, as yet, it is not certain how it will be paid for.
On the other hand, other things in the dossier have been costed, such as restoring the education maintenance allowance at a cost of £596m.
Labour says additional corporation tax will pay for this. They have recently explained how changes to capital gains tax will help pay for extra police officers. They have also spelled out how increasing the carer's allowance will be funded by reversing cuts to inheritance tax.
So some taxes will go up - but it is not fair to say that Labour has not been clear on these issues.
Labour also challenges claims that they intend to increase benefits for under-25s or reverse savings to the arts budget.
"The claims are flimsy," says Labour's national campaign co-ordinator, Andrew Gwynne.
The biggest figure in the Conservative dossier is a £35bn annual bill on infrastructure, manufacturing and new industries.
Labour has indicated it wants to spend £500bn over 10 years through a publicly owned investment bank to build a new high-tech, low carbon economy.
John McDonnell has said £350bn of it would come from government with the rest borrowed at low interest rates. However, Labour point out that this is capital spend, not government revenue spend. In other words, they would expect a return on their investment.
These are the big arguments ahead in the campaigns. Certainly there are unknowns that are yet to be cleared up - and may well be in the manifestos. It is clear Labour will reverse some of the Conservatives austerity savings and plan to spend more.
They will therefore need to borrow more or raise more tax. However, the Tories have by no means got the monopoly on clarity when it comes to future tax and spend plans.
Both parties claim they have done all the necessary calculations and all shall be laid bare in the manifestos. We shall soon see.