“The deficit is down by four-fifths”
This is similar to a claim Theresa May made in 2017, when she said that since the Conservatives took office in 2010, “the deficit [had] fallen by three quarters as a share of GDP.”
In her speech this week, the Prime Minister wasn’t quite so specific, but we’ll assume she was again talking about the deficit as a share of GDP.
If so, she’s correct.
In 2009-10, the deficit — the difference between the amount of money the government raises in taxes compared to what it spends — was 10 per cent of national income. The latest figures for 2017-18 show that figure is now 2 per cent, which is a four-fifths reduction, as Mrs May claimed.
But there’s a big ‘but’.
When he became Chancellor in 2010, George Osborne (remember him?) declared that the government’s aim was to eliminate the day-to-day budget deficit by 2015. But he wasn’t even the Chancellor any more when that target was actually met in 2017, two years behind schedule.
And that target didn’t include the wider deficit, which includes capital investment. At the last Budget, the current Chancellor Philip Hammond said it’ll be 2025 before those books are balanced.
And it gets worse: Robert Chote, head of the independent Office for Budget Responsibility shot down Mr Hammond’s 2025 prediction as “unlikely”, and says it could be 2031 before the target is met.
FactCheck verdict: The deficit has fallen by four fifths since 2010. But remember, the Coalition government said it would eliminate the day-to-day budget deficit by 2015, and missed its target by two years. The current Chancellor expects it will be 2025 before the overall budget deficit is eliminated, and the head of the independent Office for Budget Responsibility says it’s more likely to be 2031 before the books are completely balanced.
“Every Labour government left unemployment higher than they found it.”
Figures for the Blair-Brown and Wilson-Callaghan administrations are from the Office for National Statistics’ dataset, which show unemployment for people aged over 16 and are seasonally adjusted. We got the earlier governments’ figures from ONS historical unemployment figures, which were published in 1996 and are not seasonally adjusted.
FactCheck verdict: It’s true that the last three Labour governments left unemployment at a higher rate than they found it. The best data we have for Atlee’s post-War administration suggests that unemployment was at the same rate when he left government in 1951 as it had been in 1945 when he entered Downing Street.
“Households where nobody works down by almost a million”
We assume Mrs May is comparing the number of workless households today with 2010. ONS statistics show there were 3,952,000 households where no-one was employed in 2010. In 2017, that figure was 2,998,000.
FactCheck verdict: Mrs May is correct that the number of workless households has fallen by nearly a million since 2010.
“We scrapped stamp duty for most first-time buyers – and over 120,000 households have already benefited”
Mrs May is talking about the First Time Buyers’ Relief scheme, which was announced in the Autumn Budget 2017.
Early statistics from HMRC show that there have been 121,500 house purchases made since the policy was introduced that have involved First Time Buyers’ Relief.
Of those, 95,700 house purchases went through without the buyers paying any stamp duty at all. But the remaining 25,900 buyers were required to pay some stamp duty because they were buying homes over the £300,000 threshold, although their stamp duty bill was lower than it would have otherwise been.
So technically, Mrs May is right that over 120,000 households have benefitted from reforms to stamp duty – some people paid a reduced rate of stamp duty, and some people didn’t pay any at all.
But as FactCheck found when the policy was first announced, First Time Buyers’ Relief is unlikely to make much of a dent in the cost of buying your first home. The average first-time buyer in London can expect to spend £106,000 on their deposit: the First Time Buyers’ Relief scheme shaves just £5,000 off that bill. In Yorkshire, where average first-time buyer deposits are £20,000, the policy saves just £100.
The Office for Budget Responsibility reckons only 3,500 people would have been able to bring forward the purchase of their first home as a result of the relief.
FactCheck verdict: Mrs May is right that over 120,000 households have benefitted from the introduction of the First Time Buyers’ Relief policy. But it’s worth clarifying that only some of those (about 95,000) paid no stamp duty at all. The rest paid a reduced rate.
And we should remember that the government’s reforms to stamp duty have only shaved a tiny fraction off the total cost of getting on the property ladder. The independent OBR estimates that only 3,500 buyers will have been able to bring forward their first home purchase as a result of the policy.