Exposing the lies in Labour's claims about Conservative spending pledges

Scroll down for the update with the official Conservative rebuttal of Labour's claims

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Alistair Darling today published a Labour Party document suggesting that there was a £34 billion "black hole" in Conservative spending plans, claiming to have assessed the cost of all Conservative policies.

I'm not sure who would want to take lessons in Maths from this Government given the parlous state of the country's finances, and needless to say, the claims are already being disputed - and not just by Conservative politicians.

The Spectator's James Forysth says that the Tories have branded it "a 'dodgy dossier' full of lies" and highlights several untruths on which it is based:

"The document says the Tories would let married couples transfer their tax allowances, when they haven’t committed to that.

"It also claims that the Tories are pledged to abolishing the 50p rate before the end of the parliament which the Tories are not." 

The Times's Sam Coates also picks up on the supposed 50p rate abolition, which Labour claimed accounts for £2.4 billion of the "black hole", and adds:

"The document also suggests that the Tories have committed themselves to avoiding the 1p increase in National Insurance, which would cost £7.17 billion in 2014/15 - which they have not. George Osborne has made it clear he really wants to promise this - but he will not do so until specific savings have been identified to pay for it.

"Secondly, you cannot necessarily trust the Treasury costings - not because the Treasury get it wrong, but because the assumptions they are directed to use may not mirror the same assumptions as the Tories."

I'll add more details as and when they emerge.

2pm update:

 Andrew Lilico, Chief Economist at Policy Exchange, offers these thoughts:

“It is certainly true that Shadow Cabinet members would be well advised to avoid additional spending commitments over the next few months, given the desperate urgency of spending cuts.  And it is also true that the Conservatives will need at some point to be plainer about the huge scale of the cuts required.  But Darling’s document this morning significantly over-eggs the pudding.  He claims the Conservatives will need to find £13bn to fund promises to reverse the NICs rises, the restriction of pension tax relief, and the abolition of the 50p rate for high earners.  But I am not aware of any specific promises by the Conservatives in those regards – and I do not believe that many in the press are even under the mistaken impression that the Conservatives have made such commitments.  Similarly, Darling appears to assume that emergency measures designed to last during the recession (such as the reduced tax on savings, which he says would still cost £4.1bn in 2014/15) would be continued indefinitely.  Again, I am not aware of any specific Conservative commitment on this point.
 
“Overall, even before one becomes embroiled in naturally contentious issues of precisely what was or was not a promise and what is the precise cost of promises actually made, I am doubtful whether more than about £6bn-£10bn of this £34bn “gap” is really credible.  Of course, £6bn-£10bn is a non-negligible figure, but given that spending cuts of around £80bn are needed whilst the Conservatives have so far announced only around one tenth of that and Gordon Brown has meanwhile lapsed back into pretending that spending will rise, the question of how the Conservatives meet their own very modest promises is far from the most pressing issue in politics.
 
“The real question that should be being debated is how we achieve £80bn in spending cuts over the next three years.  Whilst Gordon Brown continues to deny this, and pretends that a £100bn fiscal correction can be delivered just by raising taxes on the rich, the UK’s spending debate will remain almost as low quality as its credit rating.”

5.15pm update:

George Osborne has issued a detailed rebuttal of Labour's claims. Click here to download the entire document, but here are some of the highlights:

Three examples alone illustrate £11.2 billion of Labour lies on tax:

• Labour's dossier includes a £2.4bn cost of abolishing the 50p tax rate, but the Conservatives have been very clear that they have not pledged to reverse this measure.
• The dossier also includes a £3.6bn cost for reversing the restrictions on pensions tax relief for higher earners, but again they have not pledged to reverse this.
• And the dossier includes a further £5.2 billion for abolishing stamp duty on shares, but this is not Conservative Party policy and never has been.

Labour have deliberately misrepresented the cost of Conservative spending commitments:

• Their figures on Swedish style school reforms suggest that a Conservative Government would increase the number of school pupils – rather than increasing the number of places.
• Their figures on health visitors are based on twice the number of new health visitors that the Tories have actually pledged. Labour have costed 8,712 health visitors but the Conservatives have pledged to deliver 4,200.

In several cases Labour’s calculations actually show Conservative policies costing less than the party had budgeted for:

• Abolishing stamp duty for first time buyers costs £300m according to Labour, less than the £400m the Conservatives had budgeted for and funded with a levy on all non-doms.
• Tory policy to cut the main rate of corporation tax by 3p costs £2.5bn according to Labour, less than the £3.7bn budgeted for and funded by reducing complex reliefs and allowances

George Osborne has also highlighted Alistair Darling's admission that VAT may go up under Labour and his inability to refute reports that his spending plans imply real terms cuts of 17% in non-ring-fenced departments:

"Day One and Labour's negative campaign is unravelling. At the launch of their dodgy dossier, Alistair Darling's answer revealed more about Labour's secret plans than what a Conservative Government would do. It was a hat-trick of own goals. In a spectacular admission, he contradicted Gordon Brown’s allies and refused to rule out a VAT rise under Labour. He was also unable to refute that Labour's plan implied 17 per cent spending cuts in non-protected departments.

“Meanwhile the credibility of Labour lies about Conservatives has collapsed. On examination, the dossier includes commitments we have never made, wild exaggerations of our costed policies and in some cases, admissions that some changes would actually be cheaper than we have budgeted for. Labour must be deeply regretting their decision to go negative on a day when the Conservatives have been so positive.”

Jonathan Isaby