“We are now this morning pledging £300 million from the £2.7 billion we will save by reversing Capital Gains Tax, to put 10,000 more police officers on our streets.”
Diane Abbott, 2 May 2017
It’s correct that reversing cuts to capital gains tax would raise £2.7 billion, according to official estimates. But £300 million a year wouldn’t cover all the cost of recruiting, equipping and training 10,000 police officers.
Labour didn’t publish information on how it worked out of the cost of additional police officers when it announced the claim, so it’s not possible for the public to scrutinise this claim fully. Some additional figures have been released to the press.
Labour hasn’t responded to our request for more information.
Reversing cuts to capital gains tax could raise around £2.8 billion over the next four years
Capital gains tax is paid on profits from selling something you bought before. For example, if you buy shares and their price goes up then you pay tax on some of the profit you make when you sell them.
In March 2016 the higher rate of capital gains tax was reduced from 28% to 20% and the basic rate from 18% to 10%. This is what Labour wants to reverse.
Doing that from April 2018 could free up just under £2.8 billion to spend up to April 2022, according to the Office for Budget Responsibility.
We don’t know what the exact revenue would be—these figures involve forecasting the future, for example who will be affected and how they will react to the policy change. These are still the best estimates available.
£300 million would cover salary costs for one year, but not recruitment or training
To work out the cost of new police officers, you would need to include how much it would cost to pay each officer, including tax and pension contributions, as well as what it cost to recruit, train and equip them. Those costs would depend on where in the UK these officers were placed and how soon they were recruited.
General estimates for the overall cost of training and recruitment are either hard to come by or not available at all, as far as we’ve found.
We do have figures from last summer on the cost of paying police officers, which include the costs of their salary and the employer’s pension and National Insurance contributions.
These are in the ballpark of £30,000 per officer.
They show a police officer on the lowest pay point would cost £28,600 in London and £25,400 across the rest of England and Wales, including their pay, tax and pensions contributions. After four years’ service, that will usually rise to £35,500 and £32,300 respectively.
But then the recruitment, training and equipment costs need to be factored in as well.
The Home Office and HM Inspectorate of Constabulary told us they don’t publish information on how much different forces spend on training and recruitment, but we have seen one estimate from a freedom of Information request made to Nottinghamshire Police in 2012.
It showed the annual payroll cost of a new police officer is £30,520 a year, with an additional £12,900 cost of recruitment and training.
If representative of other forces, this suggests you’d need almost half the money you pay an officer again to cover the recruitment and training costs.
This isn’t a great deal of evidence, but it does indicate that 10,000 police officers would cost more than the £300 million claimed, taking the associated costs into account.
More detailed figures have been reported elsewhere
The Guardian has reported a more detailed set of figures, which might have come from information given directly to journalists:
“Labour’s figures show that in 2017-18 its police recruitment drive would cost £64.3m, £139.1m in 2018-19, £217.2m in 2019-20 and £298.8m in 2020-21, making a total of £771m or nearly £800m over the life of the next parliament.”
They suggest that Labour might be proposing a staged introduction of the 10,000 additional officers—which could explain some of the costing. We can’t know without more information from Labour. So far, the claim hasn’t been justified.