Examining Labour claims about future cost of Tory borrowing plans

Labour assumes the Conservatives’ tax-and-spend policies will lead to a £71bn spike in borrowing over the next parliament.

When public spending is higher than tax receipts, governments may borrow to plug the gap.

Labour has calculated the Tories’ manifesto pledges would lead to a £71bn borrowing increase over the next five years which would raise interest rates by 0.56 percentage points every year on average, modelled on previous Treasury research. This is how the party has arrived at the £4,800 figure.

But the calculation relies on a number of assumptions.

For example, it assumes the Conservatives’ welfare reform plan will fail to save any money – despite the Tories pledging to find £12bn a year by the end of the parliament.

It is true that questions have been raised about whether the full £12bn of savings can be found.

This includes the independent Institute for Fiscal Studies (IFS), which described the Tory welfare pledges as “not remotely up to the challenge”, external. The IFS also points out some announcements are not new, meaning any potential savings have already been factored into official forecasts.

But despite the scepticism, it is by no means certain that the Conservatives will fail to find any welfare savings at all, as Labour assumes.