The Labour Party has accused the Conservatives of proposing unfunded tax cuts, after chancellor Rishi Sunak suggested that manifesto promises on welfare cuts had already been announced. The Conservative Party manifesto is funded in large part by suggested cuts to spending on benefits. Sunak wrote in a newsletter to his constituents that the tax cuts in the Conservative manifesto would be funded by an “enormous back to work programme”. Labour pointed out that this suggests the welfare cuts are not new and that the money to support them has already been spent.
Sir Keir Starmer, who is leading Labour’s Brexit and international efforts, described Sunak’s comments as “truly extraordinary”, and said that they amounted to an admission that the Conservatives’ flagship welfare cuts involve “money that is already accounted for”. Starmer emphasised that the major problem is that “the money isn’t there” to fund the cuts.
The Conservatives have defended their proposals, arguing that Labour are in “complete denial” about the increase in the benefits bill and that the savings they intend to use to fund tax cuts will come from new policies. Government spending on health and disability-related benefits has increased by £20bn in real terms since 2019, with a further £11bn rise forecast over the next five years. Conservative Party proposals would cut £12bn a year in government spending on benefits compared to forecast levels by 2029.
However, if Labour claim that policies are already factored into government plans, then the savings would be much smaller and unable to fund tax cuts. Nevertheless, according to Sunak’s newsletter, if the Conservatives win the election they will use the savings to fund a 2p cut to national insurance for workers and the abolition of national insurance for the self-employed, the flagship measures in Sunak’s manifesto.
The Conservative campaign argues that their claims about welfare savings have been announced since Sunak’s Autumn Statement or will be made in the future. The party points to a range of measures designed to cut costs, including halting the surge in claims for disability benefits and tougher powers to remove benefits from those who refuse work. Nevertheless, much of the Conservatives’ drive for savings from the welfare bill would come from stopping the increased number of people claiming disability benefits, primarily the Personal Independence Payment
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