Jeremy Corbyn's spending plans would create an extra £330 billion of debt, taxpayers claim

Labour government under Jeremy Corbyn predicted to cost UK £330 billion

Labour Shadow Chancellor, John McDonnell sparks concern over PFI plans

Monday, November 27, 2017

New research carried out by the TaxPayers' Alliance has slammed John McDonnell's claim that Labour's public spending package would "pay for itself".

The research found that a Labour Government under Corbyn would spend an additional £100 million in 2017-2018, on top of the current Government spending plans. For a full five-year Parliamentary term, it is thought that Labour's spending plans would create £329 billion of extra debt.

The alliance suggest, by 2022-23, the debt interest on Labour's spending commitments would come to £7.4 billion, and Labour's additional spending pledges would necessitate £25 billion in additional interest payments over the six-year period.

Currently, the UK owes £1.8 trillion in national debt payoffs, and there is evidence to suggest that Labour would borrow an extra £330 billion rather than pay off the existing debt. 

John O'Connell, chief executive of the TaxPayers' Alliance said: "The shadow chancellor’s claim that borrowing plans would ‘pay for itself’ is entirely wrong.

"Even when taking into account revenue raised from proposed tax hikes, [Labour's pledges] would cost Britain more than £270 billion in debt interest payments over the parliament. Britain is up to its neck in debt, yet politicians of all parties continue to make extraordinary spending pledges that puts huge pressure on taxpayers.”

When BBC Radio 4 questioned him about the figures and borrowing plans, Mr McDonnell failed to answer the question eight times, putting pressure on whether he is out of his depth. McDonnell only stated that "this is why we have iPads." 

Labour's raft of pledges includes estimated annual spending of £25 billion on the National Transformation Fund and £35 billion to the National Investiment Bank, to fund public works and galvanise the economy.

Corbyn and McDonnell maintain that their pledges are properly costed, however many economists suggest their economic plan is based on best-cased scenarios and may result in higher rates of tax avoidance.

Since 2010 the Tories have attempted to tackle the UK's debt, however it has been revealed that it may not return to pre-Crisis levels until 2060.