8 months, 2 weeks ago

BBC Question Time leaders special: Jeremy Corbyn fact checked

In the BBC Question Time leaders special, Jeremy Corbyn said of the options that would be included in Labour’s planned second referendum: “This will be a trade deal with Europe or remaining in the EU, that will be the choice that we put before the British people within six months. Any other option will require years of negotiations, either with the EU or the USA and put our public services at risk.”

This is not Labour’s position. Labour’s proposal is not to negotiate a trade deal with the EU before the referendum (which they have promised within six months of being elected). They propose to renegotiate the withdrawal agreement, and the non-binding political declaration on the future trade relationship between the EU and the UK, but this is not the same as negotiating a trade deal.

The EU has said that it will not begin negotiations on a trade deal (and other aspects of the future relationship) until a withdrawal agreement is ratified.

It’s possible that Mr. Corbyn simply misspoke when he said “trade deal”, but his subsequent comments that “any other option will require years of negotiations” add to the confusion. 

If Leave were to win the referendum on Labour’s renegotiated withdrawal agreement, the UK would still have to finalise its new relationship - we don’t have enough details on what Labour’s Leave deal would mean to know how difficult that would be, and therefore how long it would take to negotiate and ratify a new agreement.  

If the UK wanted to join an established organisation like the European Economic Area (the arrangement that allows Norway, Iceland and Lichtenstein barrier-free access to the Single Market), that could be easier to agree than a comprehensive free trade deal - but other EEA members would need to agree the UK should join. Labour has not so far said this is what it wants, talking instead of a “strong economic relationship” based on “close alignment.” 

If Labour wanted to negotiate a bespoke trade deal with the EU, that would likely take longer. There is no realistic prospect of Mr. Corbyn’s trade deal being in place immediately after a second referendum result.

Mr. Corbyn also said, when talking about Labour’s tax policies, “95% of the population will pay no more whatsoever in tax. The top 5% will pay a bit more.”

This is wrong: Labour does propose some tax changes that would result in some of the 95% paying more. As we wrote in our fact check of Labour’s manifesto: “It’s correct that the Labour manifesto plans no increases in VAT, income tax or National Insurance for people earning less than £80,000.

It’s also correct that people earning less than £80,000 account for around 95% of taxpayers (somewhere between 95% and 96% according to 2016/17 figures from HMRC).

But that doesn’t mean Labour plans no tax rises whatsoever for these people, because there’s more to tax than just VAT, income tax and National Insurance.”  For example, as an audience member pointed out, Labour’s manifesto commits to scrapping marriage allowance.

The Institute for Fiscal Studies manifesto analysis said: “If you want to transform the scale and scope of the state then you need to be clear that the tax increases required to do that will need to be widely shared rather than pretending that everything can be paid for by companies and the rich.”

You can read more on this issue in our fact check of the manifesto.

8 months, 2 weeks ago

BBC Question Time leaders special: Boris Johnson fact checked

Fiona Bruce and the Prime Minister clashed during his Question Time Leaders’ interview over how many “new hospitals” are being built.

BJ: As a result of the decisions that we have, in ten years time, 40 new hospitals will have been built. 

FB: It is six, just so we're clear.

BJ: Yes we're starting with six but there are 40 on the program.

FB: At the moment it’s upgrading six existing hospitals-

BJ: No, sorry, no, no, it’s building six new ones immediately, but a program over the next 10 years with seed funding already going in to build 40 new hospitals.

Fiona Bruce was right, and Boris Johnson was wrong to correct her.

The government’s latest announcement was to upgrade six hospitals by 2025, not to build six brand new hospitals. Some of these plans (such as at Whipps Cross in London) involve completely replacing the existing hospital with a new building, but all six are upgrades to existing hospital sites. 

You can argue about whether it’s fair to call those “new hospitals”, but in denying Fiona Bruce’s perfectly accurate description of the plan as “upgrading six existing hospitals”, Mr. Johnson got it wrong. The clear implication the viewer would have taken from the exchange is that these are new hospitals where none previously existed.

On the issue of the plan for 40 hospitals, another 21 hospital trusts are being given £100 million in seed funding to prepare a business case for their hospitals—but no money for any actual building work. The plan is for works on these hospitals to take place between 2025 and 2030.

So the 40 new hospitals Mr Johnson referred to includes the six hospital upgrades described above, plus 34 that the government says that seed funding will cover. 

The Conservative manifesto hasn’t been published yet, so we don’t know if it will have any more detail on how these extra 34 hospitals will be funded, but given that building work on them is unlikely to happen in the lifetime of the next parliament it wouldn’t be a surprise if it wasn’t.

The government has also previously made a separate announcement, for £850 million for 20 hospitals to receive upgrades to facilities and equipment over the next five years.

We’ve written more about these hospitals plans here.

Boris Johnson also said that the Conservatives are putting the “biggest ever cash boost” into the NHS. 

He’s presumably referring to the increase in NHS funding for England planned for between 2018/19 and 2023/24. Accounting for inflation, which is how prices change over time, it’s about £20.5 billion

It’s incorrect to say that’s a record amount of money. For example, between 2004/05 and 2009/10 the real terms increase was higher at £24 billion.

8 months, 2 weeks ago

BBC Question Time leaders special: Nicola Sturgeon fact checked

Nicola Sturgeon was challenged on tonight’s BBC Question Time about Scotland’s high budget deficit, after an audience member pointed out it would need to bring its deficit down to levels acceptable to the EU if it wanted to join. She argued that “that is a deficit that has been accrued under the Westminster system of government”.

Scotland’s net fiscal deficit is higher than that of the UK as a whole, as a proportion of the size of its economy. In 2018/19 it’s “deficit” was between 7 and 8.5% of its economy, depending on whether and how you count revenues from North Sea oil. By contrast, the overall UK budget deficit is expected to be about 2% of GDP in the same year.

It’s correct to say, as Ms Sturgeon goes on to, that “I don't control as first minister the macro economic policies of the United Kingdom.” In other words, the Scottish government can’t control things like interest rates.

The underlying argument here is that the deficit faced by an independent Scotland could be lower than it has as part of the UK, but independent experts have suggested this is unlikely to be the case.

As the Institute for Fiscal Studies has pointed out in the past, an independent Scotland would face pressures on its budget and would need to take action either by raising taxes or cutting public spending.

It also points out that the main policies to promote economic growth proposed during the last independence referendum were tax cuts and spending increases, which would increase Scotland’s budget deficit (in the near-term).

Scotland has some control over its own deficit at the moment, as it has powers to raise some taxes on its own. At the moment, around 29% of all the revenue collected in Scotland is devolved—which is much higher than it was before recent Acts of Parliament transferred additional powers to the Scottish government.

But another factor behind Scotland’s relatively big deficit is that government spending per person is higher in Scotland than the UK average. The Scottish government has previously put forward some reasons why, including its low population density and greater need for certain public services.

8 months, 2 weeks ago

BBC Question Time leaders special: Jo Swinson fact checked

Jo Swinson claimed that as a result of leaving the EU “we are going to be poorer, people are going to lose their jobs, there will be less money for our NHS.”

None of these statements is flatly incorrect, but they all need some clarification.

On the question of being poorer, it’s important to understand that expert forecasts don’t expect the UK to be poorer than we are now. Rather, they estimate that the UK economy would grow by less in a Brexit deal scenario, compared to a scenario where we remain in the EU.

Most forecasts from the government and expert think tanks expect UK GDP to grow by between 2% and 7% less in a scenario where we leave with a Brexit deal, compared to one where we remain in the EU. GDP is the value of everything produced in the UK economy.

These estimates are each looking at slightly different time periods (ten to fifteen years), and slightly different modelled Brexit scenarios—but they all broadly resemble Boris Johnson’s proposed deal.

It’s also important to remember that these are only modelled estimates, which means they contain quite a lot of uncertainty. For example, if a decision to remain in the EU was followed by intense political pressure to leave or have another referendum, this could create more economic uncertainty and affect GDP, meaning less of an economic benefit from remaining.

Whether Brexit means “less money for the NHS” really depends on how the government of the day chooses to manage its accounts. We’ve previously found that the Lib Dems’ estimate of a £50 billion “bonus” in additional money for the government to spend in a remain scenario is reasonable (although highly uncertain, for the reasons given above). 

But the Lib Dems don’t plan to spend most of that “bonus” on the NHS; it’s mostly going on education pledges, such as 20,000 extra teachers. So while remaining might mean more money that could potentially be spent on the NHS, it doesn’t necessarily mean that’s where the money will go. 

You could imagine a government spending more on the NHS in a Brexit scenario, than another government would spend in a remain scenario—if the government in the Brexit scenario is committed to more NHS spending overall. 

As for the questions of job losses, none of the recent forecasts of Boris Johnson’s Brexit deal we've seen have addressed the issue in detail. It seems likely that some companies would pull out of the UK—at least in part—in a Brexit scenario, leading to job losses, but we don’t have a clear picture of what would happen to the overall employment picture.

UK in a Changing Europe says that a Brexit deal with a “restrictive” migration policy would lead to 550,000 fewer people in the workforce than in a remain scenario—but this is due to reduced immigration, not job losses.

8 months, 2 weeks ago

Fewer than half of limited companies make less than £10,000 in profits

Following on from our earlier post about Nigel Farage's corporation tax numbers, we've heard back from the Brexit Party who've clarified that their policy is to waive corporation tax for the first £10,000 of pre-tax profits that companies earn.

Mr Farage is still wrong to claim that two-thirds of businesses make £10,000 or less in profits. In fact fewer than half of limited companies earn less than this.

We've looked at the details here.