Conservatives repeat misleading £2,400 cost of Labour figure
During his Conservative manifesto launch speech, Boris Johnson said Labour’s plans mean “higher taxes for everybody in this country, £2,400 extra.” The claim also appears in the Conservative manifesto.
This figure was first calculated by the Conservatives before the publication of Labour’s manifesto, so we called the calculation “largely meaningless”, as the Conservatives couldn’t know, at the time, exactly what Labour’s policies were.
Now that Labour’s manifesto has been published, we know it proposes £83 billion of increased spending by 2023/24. Labour has since announced compensation for the WASPI women at a cost of up to £58 billion in total (so an additional £11.5 billion per year).
If you divide that £83 billion figure by the number of income tax payers in the UK, it gives you a figure of roughly £2,600, or adding in the funding for WASPI women, the figure would be £3,000. But those figures are meaningless. They don’t mean that every income tax payer will have to pay this to fund the pledges.
That’s because Labour does not plan to fund its spending pledges through higher income tax for everybody (and even if it did, the cost would fall disproportionately on higher earners).
Labour doesn’t plan to raise income tax for those earning under £80,000 a year, and says that this increased spending will mainly be funded through taxes including corporation tax, a financial transactions tax, and higher income tax for those earning over £80,000 a year.
The IFS says that “it is unlikely that one could raise the sums suggested by Labour from the tax policies they set out.”
So Labour’s calculations have their problems, but it’s wrong to suggest that every income tax payer in the UK will fund every penny of Labour’s additional spending, and in equal amount.