11 Jun 2024

‘Conservatives haven’t even tried with this manifesto, it’s embarrassing,’ says Shadow Treasury Chief Secretary

We spoke to Labour’s Shadow Chief Secretary to the Treasury, Darren Jones, following the Conservative Party manifesto launch.

Krishnan Guru-Murthy: How does Rachel Reeves know what it’s going to cost my mortgage? She’s making that up.

Darren Jones: She’s not making it up, Krishnan.

Krishnan Guru-Murthy: You don’t know what my mortgage is.

Darren Jones: You can look at average mortgage rates across the country. The way we get to that figure is that you look at the unfunded policies in the Conservative manifesto today. She said over £70 billion over the course of the parliament. If the Conservatives have not set out how they’re going to raise the money to pay for that adequately, you have to assume it will be paid for by borrowing. And then we use Treasury algorithms, which show the relationship between national borrowing and interest rates, as we all experienced after Liz Truss crashed the economy.

There is a direct connection between national borrowing for unfunded policies from the Conservatives and family finances in terms of their mortgage. That’s how we get to the ‘on average’ estimate of an additional £4,800 on mortgage payments as a consequence of the borrowing to pay for over £70 billion of unfunded Conservative promises in their manifesto today.

Krishnan Guru-Murthy: There’s a lot of assumptions in how you get to that number which you’ve just laid out, and the truth is, you don’t know whether the Conservatives would be able to deliver on either welfare cuts or tax evasion. You both have the same problem. They’re promising something they can’t prove. You can’t disprove it.

Darren Jones: No, no, no. Look at the Conservative manifesto today. Let’s take, for example, tax avoidance. In their profile, year on year, they’ve literally gone in billions. Two, three, four, five, six with no explanation as to how they’re going to raise that additional money. They’ve literally just gone on the keyboard two, three, four, five, six.

Labour’s plan, which you’ll see in full detail on Thursday, is fully funded and fully costed. We’ve had to say how much money we’re going to put into HMRC, how we’re going to spend money in order to get money back out through tax avoidance measures. The Conservatives haven’t even tried today. It’s embarrassing.

Krishnan Guru-Murthy: Just for clarity, so it’s about £4,800 on an average mortgage, 85 per cent of the average house price value, and that’s over five years. So it’s actually less than £1,000 a year, you’re saying, about £90 a month or something like that?

Darren Jones: This is on top of everything that people are already paying on top of their mortgages and rent as a consequence of Liz Truss and now Rishi Sunak is making these promises to put family finances at risk again. Have they not learnt the lessons?

Krishnan Guru-Murthy: You will be honest about taxes going up, won’t you? I mean, they will go up, as the tax burden rises during the next government if you’re in power, won’t they?

Darren Jones: So there are two points to this, as I know you’ve been pursuing over the last few days on the show. The first is the headline rate of tax. We’ve got a very clear triple lock promise from the Labour Party, no increase to the headline rate of tax on income tax, national insurance…

Krishnan Guru-Murthy: But you will be gathering more income tax won’t you, because you are also freezing the thresholds. So you might not raise the rate but you will gather more. We will pay more in income tax.

Darren Jones: That was going to be my second point. So the first point, no headline rate increases on income tax, National Insurance or VAT. That’s a promise from the Labour Party for the course of the next parliament if we win the election. But you are right that the Conservatives baked in thresholds, so the amount at which you earn before you start to pay certain levels of tax, is what we would inherit if we win the election on 4 July.

What we’re not going to do, unlike the Conservatives today, is just make up promises that are not fully funded. The money is not there for the Conservative Party manifesto today, whereas the Labour Party manifesto is fully funded and fully costed with that guarantee not to increase income tax, National Insurance, or VAT on working people.

Krishnan Guru-Murthy: So that leaves capital gains tax and corporation tax as the ones you’re probably going to put up?

Darren Jones: No.

Krishnan Guru-Murthy: Why don’t you just be honest about that?

Darren Jones: I am. Can I just say I pride myself on being honest and answering questions frankly and straightforwardly. So let me do it now. All of our policies in our manifesto are fully funded and fully costed on the basis of one, the baseline of public spending we would inherit if we win the election, and two, the five or six loophole closures which I can go through on private schools, on non-doms…

Krishnan Guru-Murthy: Why won’t you rule out capital gains tax and corporation tax in the same way that you’ve ruled out income tax, National Insurance and VAT?

Darren Jones: Because our policies are all fully funded and fully costed. I don’t have to rule things in or out because they’re funded by the tax loophole closures that we’ve set out, all of our first six steps that we’ve set out already and in more detail in our manifesto on Thursday.

Krishnan Guru-Murthy: But if you can rule out three taxes, you could rule out other taxes. If you’re saying everything’s fully funded, you could rule out, for the next parliament, raising capital gains tax and corporation tax?

Darren Jones: The tax code, as you probably know, Krishnan, is tomes and tomes of books, but we don’t need to increase taxes. There is absolutely a promise from us that we will not be increasing income tax, National Insurance or VAT.

Krishnan Guru-Murthy: But there is a difference between what you’re saying isn’t there on income tax, National Insurance and VAT, which is a cast iron promise, and what you’re saying on other taxes, which is we don’t need to raise them, but you’re not ruling out raising them. And people will look at all the warnings from the IFS and other economic experts and say there is a likelihood that taxes are going to have to go up, and those will be the ones?

Darren Jones: We can’t keep taxing people, Krishnan, to just pay for more and more public sector budgets. We’ve got to do two things. We’ve got to get the economy back on track and growing again. We all know that. The Tories failed to do it. We have a plan to get growth back into the economy, and we’ve got to modernise our public services so that they’re more efficient in delivering the services that people rely on, so that we’re spending taxpayers’ money as well as we can.

But all of our policies and our manifesto, which will be published on Thursday, are fully funded and fully costed, with the commitment not to increase income tax, VAT or National Insurance. And they’re funded by a small number of tax loophole closures on things like VAT on private schools, private equity bosses, bonuses, non-doms, tax avoidance and a windfall tax on the oil and gas giants for the money they’ve raised through the energy crisis. All of that’s fully funded, fully costed, unlike the Conservative Party manifesto today.