Labour accuses Tories of planning unfunded tax cuts

Labour has accused the Conservatives of proposing unfunded tax cuts after Jeremy Hunt suggested key manifesto promises on welfare cuts had already been announced.

The Conservative manifesto is funded in large part by proposed cuts to spending on benefits, which the party says are not currently government policy.

But the chancellor wrote in a newsletter to constituents last week that the tax cuts in the Conservative manifesto would be funded by savings from “an enormous back to work programme (which I announced in the Autumn Statement last year)”.

Labour seized on his comments as evidence that the welfare cuts “are not new” and “the money has been spent”.

Sir Keir Starmer said the comments were “truly extraordinary”, and amounted to an admission that the Conservatives’ flagship welfare cuts involve “money that is already accounted for”.

Sir Keir added: “The money isn’t there and that’s the major problem.”

The Conservatives said Labour were in “complete denial” about the rise in the benefits bill and insisted 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 risen by £20bn in real terms since 2019, and a further £11bn increase is forecast over the next five years, making this a significant policy challenge for whichever party wins the general election.

It is especially crucial for the Conservative Party because they have said they would cut £12bn a year in government spending on benefits compared to forecast levels by 2029.

Those savings make up around two-thirds of the money being used to fund manifesto pledges on tax cuts and increased defence spending.

But if the policies are already factored into government plans, as Labour claim, then the savings would be much smaller and unable to fund tax cuts.

Mr Hunt, who has acknowledged he faces a tough battle to win his constituency of Godalming and Ash on 4 July, writes a newsletter for constituents twice a week.

At the start of the campaign he told recipients: “I write them myself so what you read will be my own views.”