Will there be half a trillion pounds of borrowing under Labour?

“If he looks ahead to what his policies would produce for this country: half a trillion pounds of borrowing, £500 billion pounds more borrowing under the Labour party”

Theresa May, 15 March 2017

It goes without saying that this claim alone doesn’t give us any real indication of what would happen to borrowing under a future Labour government. The party hasn’t said it plans to borrow this much anyway, and as Jeremy Corbyn said this week “our programme is not complete”.

Mrs May appears to be referring to Labour’s recent plans for investment spending, although we’ve seen similar claims to this several years ago as well. The Shadow Chancellor announced last summer:

“Today I am making a firm pledge: on coming to power, Labour will set up a National Investment Bank, and a network of regional banks whose aim is to help mobilise £500 billion into the economy and transform Britain.”

That’s not all intended to be government borrowing. It’s made up of £250 billion of government investment spending and £100 billion of funding for a national investment bank. The bank would raise another £150 billion from the private sector. That’s similar to how the European Investment Bank works.

The £250 billion in government-funded investment spending is also spread out over a decade, so it’s more like £25 billion a year.

By comparison, the current government borrowed about £52 billion in total last year and spent £80 billion in investment.

So it would be a significant increase in government investment, even if we don't know exactly what proportion of the funding would be spent.

Borrowing to invest isn’t necessarily a bad thing either. And as the Independent’s Ben Chu points out, the government itself says there are £483 billion worth of investment projects in the pipeline and plans over £100 billion in investment spending by the end of the decade.