George Osborne's £34 Billion Credibility Gap
- The Labour Party has today published a factual account of the cost of the Conservatives' promises.
Key points
- Labour's analysis exposes the credibility gap in the Tories' pledges - £34 billion of promises they cannot explain how they fund.
- The Conservatives have planned tax cuts that would cost the exchequer £21 billion each year by the end of a Parliament.
- They have said they would reverse planned tax increases in areas like National Insurance, the new 50p top rate of tax and pension tax relief, which raise £13.3 billion per year.
- In addition, they have made £11.1 billion of clear spending commitments - as well as many potentially expensive promises which are too vague to cost.
- They say they can pay for their promises by cutting back spending and making savings in some areas - but the savings they have announced so far would only raise £6.6 billion per year.
- They have also announced a handful of tax rises, such as a levy on "non-doms" - but these only raise a total of £5.1 billion per year.
- The net effect of all this is a £34 billion total gap remaining in their plans by the final year of a Parliament, which they cannot explain.
- The Conservatives need to find this extra £34 billion just to fund their promises. It can only be found through extra taxes or cuts in spending. Or else they need to drop their expensive pledges.
- This has nothing to do with getting debt down - it is just about meeting the Conservatives' own promises. However, if they want to cut the deficit "further and faster" than Labour, that will cost them an additional £26 billion, over and above this £34 billion credibility gap.
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Labour's Chancellor of the Exchequer, Alistair Darling, said:
"Over the last couple of years, David Cameron has gone round the country telling people whatever he thinks they want to hear.
"Every audience gets told whatever they want.
"You want tax cuts, here they are.
"You want a faster cut in the deficit, we'll do that too.
"You want more spending, here it is. Lots of it.
"You want to reverse what Labour's doing, we can do that too.
"No one is keeping tabs on all their promises - certainly not George Osborne.
"Until today. For the first time, we have brought all the Tory promises together and I can tell you the bill for all this.
"The Tories have made over £45 billion of pledges, but can barely explain how they can pay for a quarter of this.
"This leaves them with a credibility gap of £34 billion."
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