Taxpayers could, on average, face a £200-a-month tax bombshell if Jeremy Corbyn gains power, the Tories claimed last night.
Conservative analysis of Labour’s socialist agenda identified a £374billion ‘black hole’, which would require tax hikes to fill.
The study, signed off by Chancellor Sajid Javid, warns that spending on that scale would land taxpayers with an extra bill averaging £2,400 a year.
Taxpayers could, on average, face a £200-a-month tax bombshell if Jeremy Corbyn (pictured with Shadow Chancellor John Mcdonnell last week) gains power, the Tories claimed last night
Labour has previously said its tax plans would only hit big corporations and the top 5 per cent of earners.
Last night Labour’s shadow Treasury minister Jonathan Reynolds described the estimates as ‘fake news’.
But Mr Javid said the scale of Jeremy Corbyn’s proposed spending meant a vote for Labour was effectively ‘a vote for higher taxes’.
The study, signed off by Chancellor Sajid Javid (pictured on Monday in Sussex), warns that spending on that scale would land taxpayers with an extra bill averaging £2,400 a year
He added: ‘Jeremy Corbyn is planning a reckless spending spree which we will all have to pay for.
He will open up a huge black hole in the nation’s finances and hardworking people will be the ones that suffer.
‘In order to pay for his policies, he will not only have to massively increase borrowing and debt, he will also need to hike up taxes by £2,400 per person –this is equivalent to an entire month’s pay for the average earner. We simply cannot afford the cost of Corbyn.’
The figures are based on a Tory analysis which suggests a Corbyn government would cost the country £1.2trillion over the life of a Parliament if it nationalises large swathes of the economy, hikes benefits and cuts the working week to four days in the public sector.
Economy growing again… slowly
Britain’s economy has avoided recession but is growing at its slowest pace in almost a decade, official figures showed yesterday.
In the three months to the end of September, Britain returned to growth, with expansion at a rate of 0.3 per cent, said the Office for National Statistics. Gross domestic product had shrunk by 0.2 per cent in the previous quarter so another contraction would have meant a recession.
The growth figure is primarily thanks to Britain’s dominant services sector and will boost Boris Johnson’s election campaign.
But the figures also showed that the year-on-year growth of 1 per cent was the slowest pace since early 2010.
Chancellor Sajid Javid said it was ‘great to see solid growth – another welcome sign the fundamentals of the economy are strong’. But Shadow Chancellor John McDonnell mocked the Tories for ‘celebrating’ growth of 0.1 per cent over the past six months.
But the report was dismissed as a ‘work of fiction’ by Labour, which said it would produce a ‘fully costed’ manifesto next week.
Despite this, the Conservatives claimed that the huge spending spree would require a raft of new taxes.
According to the Tory study, Labour’s plans would involve an additional £546billion of spending on capital projects, along with £651billion on day-to-day spending.
Under Mr McDonnell’s spending rules, Labour can borrow money for capital spending on things like schools and hospitals.
But the Shadow Chancellor’s ‘fiscal credibility rule’ forbids the party from borrowing to finance additional day-to-day spending, raising the prospect of further tax hikes.
The Tory analysis suggests that Labour’s last manifesto would have increased taxes by £277billion over five years, leaving the party £374billion short.
If the bill was levied over the UK’s 31.2million taxpayers, they would each face an additional bill of £12,000 over five years – or £2,400 a year.
However, the figure is likely to be highly contentious. At the last election, Labour said its plans would only involve the top 5 per cent of earners paying ‘a little more tax’.
Mr Reynolds said: ‘This is more fake news from Conservative HQ. Labour will set out our plans fully – and our costings – when we release our manifesto. The Conservatives should spend more time looking at their own policies as they failed to produce costings at the last election.’
Mr McDonnell has previously flirted with the idea of replacing inheritance tax with a ‘lifetime gifts tax’ which could lead to millions of families paying more over time.
Labour is also considering a report which called for a ‘progressive property tax’ to replace council tax.