“According to the Institute for Fiscal Studies, and our own independent research, writing off the Tories’ student debt now would cost about £10bn by 2050. Waiting until 2022 could treble the cost of the write-off.”
We assume the shadow chancellor is talking about the debt accrued by students under the higher tuition fees introduced by the Conservative-Liberal Democrat coalition government in 2012.
If so, he’s wrong on one count: the IFS research that Mr McDonnell cites actually estimates that it could cost £20bn by 2050 to write off student loans accumulated under the £9,000 system.
That’s twice as much as Mr McDonnell claims. We’ve asked Labour to clarify but haven’t had a reply yet.
He is right on the second point. Waiting another five years to write off student debt incurred in the £9,000 era would treble the cost to the public purse, pushing it to £60 billion by 2050.
“This Tory Government plans to invest in the north just one-fifth of what it will spend on transport per head in London.”
Mr McDonnell is right that the Conservatives plan to spend much less on transport per person in the North of England than in London.
We’re not sure what analysis the shadow chancellor based his claim on, but a recent study by the Institute for Public Policy Research found that the average Northerner would get about one quarter of the amount spent on a London commuter, not one fifth.
The report noted: “Chronic public under-investment underlies some critical issues with transport infrastructure in the North – particularly regarding road and rail.”
“The scandal of the Private Finance Initiative, launched by John Major…”
The shadow chancellor is right to say that Private Finance Initiatives began in the early ‘90s, when John Major’s Conservatives were in power, as a way of financing public infrastructure through private investment.
But he fails to mention that the number and value of PFI contracts only really took off when Tony Blair’s Labour were elected in 1997. Treasury statistics show how popular it became in the New Labour years:
Successive governments found these funding contracts irresistible as a way of building schools, hospitals and prisons without paying large sums up front. But the concept has been criticised as a bad deal for taxpayers in the long run.
Despite the era of Tony Blair and Gordon Brown being the golden age of PFI, Mr McDonnell says elsewhere in his speech that they “recognised and delivered the scale of public investment that a 21st century society needed.”
“We’ll bring existing PFI contracts back in-house. We’re bringing them back.”
This sounds like a commitment that a Labour government would take over ALL outstanding PFI contracts.
But shortly after the speech, Labour aides toned the language down, saying a Labour government would review all existing PFI contracts and take them over “where necessary”.
“The pay of FTSE 100 Chief Executives is 160 times that of the average worker.”
This is correct, based on the median salary for full-time workers in the UK, which is £28,000.
Read the full FactCheck here.