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Jeremy Hunt has been accused of exaggerating the Conservatives’ economic performance and presenting a “false record” of Labour’s spending plans as he sought to put low taxes at the heart of his party’s bid at the next election.
The chancellor gave a speech in central London on Friday in which he credited the Conservatives with helping the UK recover from economic problems faster than expected. It also signaled a further cut in national insurance in the autumn after already reduce tax from 12p in the pound to 8p.
“If we can afford to go further, responsibly, to reduce the double tax on labor this fall, that’s what I will do,” he said, arguing that the economy had already “turned the corner.”
In contrast, he paints Labor as a high-tax country and published a dossier claiming £38bn of unfunded policies, from spending on more GP appointments to extra mental health support teams.
The spending was carried out by civil servants at the request of the government, but was based on interpretations of Labor policies provided by special advisers to the Conservatives.
Darren Jones, the shadow chief secretary to the Treasury, described the document as “a desperate and cheap political ploy with a flawed fraudulent record to distract from the Tories’ record in government”.
“But if the Tories want to play that game, we’re happy to play it because we’re confident that our plans are fully funded and spent,” he said.
Labor said there were at least 11 serious omissions in the Conservatives’ claims about their policy spending and that the Tories had said they wanted to scrap National Insurance, which would cost £46bn, without saying how they would pay for it.
Jill Rutter, a senior fellow at the Institute of Governance and a former Treasury civil servant, said such Whitehall spending should be “taken with a very large grain of salt” because it was commissioned by government ministers and relied on assumptions by their political advisers.
Economists also wondered Hunt’s claims that the Conservatives have managed the economy well over the past 14 years.
In his speech, Hunt acknowledged that families had been “battered by the global shocks” of the Covid pandemic and the energy crisis caused by the war in Ukraine, but argued that the Conservatives had protected people’s finances.
He also insisted the economy was doing well, with inflation up to 3% and the country emerging from a shallow recession with a “soft landing”.
Dario Perkins, a former Treasury official who now heads global research at economic consultancy TS Lombard, said Hunt’s claim that Tory policies had benefited the UK economy was “strange”.
He said: “We have had the worst decade of productivity growth since the industrial revolution and shockingly low levels of public and business investment. And this has put enormous pressure on the standard of living.
“The Conservatives had an obsession with austerity after the financial crash [in 2008] at a time when businesses and households were also reducing borrowing, which was a disaster for the economy.
“It’s hard to see how, if you look at the long-term health of the economy, you get anything positive out of the last 14 years.”
Karis Roberts, chief executive of the IPPR think tank, also questioned Hunt’s interpretation, saying: “The economic story of the last 14 years has been one of turbulence.
“There is no doubt that the financial crisis, the pandemic and the war in Ukraine have put external pressures on the UK economy. However, the UK has faced weak productivity growth, stagnant incomes and widening regional inequalities, and these have deeper roots than recent pressures. There is much to be proud of in the UK, but our recent economic performance is not among them.’
Paul Johnson, director of the Institute for Fiscal Studies, said Hunt was “absolutely right to draw attention” to the pandemic and energy shock, which were “not the government’s fault”.
He said it is certainly the case that “real incomes are rising at the moment, but our expectation is that household incomes will not be higher at the end of this year than they were in 2019, which is quite remarkable.” .
He added: “What we have had is a long period of stagnation and if you look over a year or 18 months, we are still in a period of stagnation.
“The numbers from the first quarter, we’ll have to wait until they repeat two or three times before we’re really confident that things are turning around.” But if you look at the last two years, it’s broadly a picture of stagnation, with what may be the beginning of a more significant upswing now, but I’d say it’s too early to get excited.”
In his speech, Hunt also attacked Labor for claims that the Conservatives’ ambition to get rid of National Insurance would lead to the end of the state pension in its current form.
The chancellor said it was “fake news” and a lie designed to scare the elderly, and that pensioners should trust the Tories for tax cuts. However, pensioners’ incomes are not reduced by the cuts to National Insurance, as this is a tax on working income.
Hunt’s speech is the fourth major press conference held by a senior politician in the past two weeks. He followed the shadow chancellor, Rachel Reeves, Rishi Sunak and Keir Starmeras the parties move into election campaign mode.
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