5 Jun 2024

‘Keir Starmer has been rumbled’ over tax, says Economic Secretary to the Treasury

We’re joined from Westminster by Bim Afolami, who is Economic Secretary to the Treasury.

Krishnan Guru-Murthy: Do you promise to tell the truth, the whole truth and nothing but the truth in this interview?

Bim Afolami: Of course, Krishnan. I always do that on your programme, as you know.

Krishnan Guru-Murthy: Okay. In that case, by how much are your plans going to mean the tax burden goes up by?

Bim Afolami: We’ve been very clear, as set out in the last budget, and statements subsequent to that, and it’s important to be clear with the viewers that the budget isn’t just a political document put out. The budget has Office for Budget Responsibility, civil servants all over it. Those budget plans are there and published for everybody to see.

Krishnan Guru-Murthy: How much does your tax burden go up by?

Bim Afolami: Actually it’s quite dependent on the nature of economic growth over the next few years. We think that our plans are going to grow the economy.

Krishnan Guru-Murthy: What did the OBR say?

Bim Afolami: What the OBR has said in relation to different aspects, so for example if you take public spending, the OBR said that we will increase public spending by a percentage in real terms every year.

Krishnan Guru-Murthy: We just see in the numbers 37.1%, isn’t it? That’s the number you’re going to get to.

Bim Afolami: Well, the problem with that number…

Krishnan Guru-Murthy: Let’s just have a yes or no, because I’m really keen on the truth on this.

Bim Afolami: Let me be very clear. The percentage is entirely dependent on how big the economy is going to be.

Krishnan Guru-Murthy: Yeah.

Bim Afolami: Forecasts are precisely that. They’re forecasts. It’s impossible to know exactly the size of the economy. That’s why OBR forecasts have been wrong in the past, as have Bank of England.

Krishnan Guru-Murthy: The prime minister didn’t say that last night, did he, when he came out with his nonsense figure?

Bim Afolami: We can talk about the figure separately. All I’m trying to say is you can’t give some sort of false precision and say, ‘well, you’re definitely going to raise taxes’. It will depend on our plans to grow the economy. We’re focused on doing that. We have been precise about key things for working people, such as we have already cut national insurance by a third…

Krishnan Guru-Murthy: No, I don’t want to go into all of that just yet. Your friends at The Spectator have used your own methodology to cost your own announced plans. And they’ve said that, if you divide it up between every working family, it would cost £3,000 for every working family. Do you accept that?

Bim Afolami: No, I don’t. I haven’t seen that figure at all.

Krishnan Guru-Murthy: Read The Spectator. They’ve done it the same way you did it. The point is, this is a dishonest way to present numbers, isn’t it?

Bim Afolami: I’m afraid it isn’t. Let me explain why, because it’s important that people fully appreciate this.

Krishnan Guru-Murthy: That’s what Gus O’Donnell said, the former cabinet secretary, a man they used to call God. He’s an eminent man. And he said, this is thoroughly dishonest.

Bim Afolami: Well, I’ve got huge respect for Gus O’Donnell. But what he also said, well rather what I heard him say, was that he has been part of many processes. It’s well known in our system where Treasury civil servants do play a part in costing policies that may be presented by an opposition. Right. So he said that he’s been part of that before.

Krishnan Guru-Murthy: He says it’s unsavoury and biased.

Bim Afolami: That’s his view. But what I’m saying is it is not a new thing that is going on here. And what we present in terms of that £2,000 number was broadly came from three sources. First of all, Treasury civil servants…

Krishnan Guru-Murthy: We told people what the sources were.

Bim Afolami: Okay, but it’s therefore what you, I’m sure, will be interrogating the Labour party, at least…

Krishnan Guru-Murthy: The top man of the Treasury says civil servants were not involved in the production or presentation of these numbers.

Bim Afolami: Of the overall document. But of course, the civil servants were involved in many of those, a majority, of the policy costings that made up the overall figure.

Krishnan Guru-Murthy: Is that how taxes work, then? You get a cost and then you divide it evenly between every working family. That’s not how tax works, is it?

Bim Afolami: I think it’s very legitimate for every working family watching this programme to know…

Krishnan Guru-Murthy: But that’s not how you set taxes.

Bim Afolami: They’re the ones who pay. It’s working families who pay the price for Labour’s tax rises.

Krishnan Guru-Murthy: Is that how you set taxes? You just divide it up evenly and everybody pays the same? And it’s only working families?

Bim Afolami: Working families are the people who pay the bulk of taxes in this country. Yes they are, they’re the ones who pay the taxes.

Krishnan Guru-Murthy: I want to point out how meaningless this figure is, because that’s not the way the tax system works. And also £2,000 is over four years

Bim Afolami: Yes. And the prime minister has been very clear about that.

Krishnan Guru-Murthy: He wasn’t.

Bim Afolami: Been pretty clear about that, as I have always been. I’ve never said that it was anything but that.

Krishnan Guru-Murthy: Aren’t you just a little bit embarrassed to be sent out to sort of defend these figures. You’re a clever man. You know it’s really misleading. It’s just not the way tax works, and you’re playing dirty now. This a new phase of the election campaign. Where you’re slinging numbers around the way the Brexit campaign did, knowing that some people will believe it, even if it’s debunked.

Bim Afolami:  No, what has happened is that Keir Starmer has been rumbled. He was rumbled last night and because he’s been rumbled, the Labour Party has spent all day trying to obfuscate and hide the fact that they have lots of plans, which are perfectly legitimate in politics, but they have not explained how they’re going to pay for them. If they say our £2,000 number isn’t right, they need to explain how much it is because we believe the £2,000 is a slight underestimate…

Krishnan Guru-Murthy: You haven’t explained your £3,000 figure.

Bim Afolami: The £2,000 underestimate, in fact slight underestimate, what we are saying is that that is what the cost would be to every working family. Because working families…

Krishnan Guru-Murthy: That is the point that’s not true.

Bim Afolami: Working families are the people who pay the price. They are the people who pay taxes in this country. It’s working families.

Krishnan Guru-Murthy: You don’t know what growth is going to be. You don’t know what borrowing is going to be. You’ve just divided up a number and shoved it out there as if it bears any resemblance to reality. Let’s move on to the opinion poll that’s out tonight, that puts Nigel Farage’s Reform two points behind the Conservatives. You are looking at a potential extinction event, aren’t you?

Bim Afolami: I don’t believe we are at all. I have long been a sceptic that Reform UK will do anything like what the opinion polls say, and the evidence for that is in byelections they have underperformed in every opportunity because Reform UK have no vision for the country. They have no policies. They’re just wreckers, they’re just negatives. They’re recipients of protest.

Krishnan Guru-Murthy: It’s working for them though, isn’t it?

Bim Afolami: Now in byelections they haven’t done very well, and I think at the general election they’ll do very poorly.