Labour’s Shadow Chancellor Rachel Reeves has accused Rishi Sunak of ‘cosplaying Liz Truss’ by making unfunded commitments in the Conservative manifesto. Reeves claimed that the manifesto contains £71 billion of unfunded commitments, which could result in ‘a second Tory mortgage bombshell’.
The UK Parliament building
Reeves raised the spectre of former Prime Minister Liz Truss’s calamitous mini-budget as she held a rebuttal press conference hours after Rishi Sunak launched his party’s General Election policy document. The Prime Minister unveiled a £17.2 billion package of tax cuts, including a further 2p reduction in employees’ national insurance.
Rishi Sunak
Labour’s analysis suggested that the Tory plans required an extra £17.4 billion of borrowing in 2029-30, and a total of £71 billion over the whole five-year period. That could result in the Bank of England putting up interest rates by 56 basis points, resulting in someone with an 85% mortgage on the average house in England facing £4,800 in extra mortgage payments over the five years.
Mortgage rates could rise
Reeves told the central London press conference: ‘The consequence of an increase in day-to-day borrowing to fund the commitments made in this manifesto would amount to a second Tory mortgage bombshell, because higher borrowing at this scale would force the Bank of England to increase interest rates.’
The Bank of England
Labour’s warning of a steep rise in mortgage costs appears to be the party’s counterpart to the Tories’ claim that a government led by Sir Keir Starmer would hike taxes by £2,000 – a much-disputed figure that has been criticised by the UK statistics watchdog.
Keir Starmer
Labour’s analysis makes a series of assumptions to estimate the cost that might be attached to the Tory policies. The Conservatives hit back by accusing the shadow chancellor of ‘confusing facts and fiction on numbers’.
The Conservative Party
Prime Minister Rishi Sunak launched the Conservatives’ General Election manifesto at Silverstone racing track. Reeves also sought to draw comparisons between Mr Sunak and Ms Truss, whose 2022 mini-budget sent the value of the pound tumbling and mortgage rates soaring due to the market’s adverse reaction to its £45 billion of unfunded tax cuts.
Liz Truss
She said: ‘He (Mr Sunak) said he was the antidote to Liz Truss. Instead, he’s cosplaying Liz Truss by again doing what the Conservatives did in that mini-budget with £71 billion of unfunded commitments.’
Rishi Sunak and Liz Truss
The former Bank of England economist warned that after the mini-budget ‘mortgage rates spiralled and people found themselves paying – the 1.5 million re-mortgaging this year alone – paying £240 extra.’
Mortgage rates could rise
Reeves also said that the £12 billion of welfare savings the Tories claimed would pay for their tax cuts had either already been accounted for by the Office for Budget Responsibility or could not be delivered.
Welfare savings
A Conservative spokesman said: ‘Once again Reeves is confusing facts and fiction on numbers.’
The Conservative Party
