CRITICS have suggested the two Tory leadership candidates have discovered the “magic money tree” given the array of spending pledges each has produced to help secure victory in their bid to succeed Theresa May in Downing St.
Paul Johnson, the director of the respected economic think-tank, the Institute for Fiscal Studies, said: “There have been some extraordinary pledges; they add up into the tens of billions of pounds.
“They claim somehow these will be paid for from this so-called ‘Brexit war chest’. Well, they are not going to be. First, that is only available in the event of no-deal not happening. And, in any case, what they are just saying is they are willing to borrow more.”
Rory Stewart, the International Development Secretary, urged restraint on his colleagues, tweeting: “Conservatives cannot criticise Jeremy Corbyn for unfunded tax and spending promises if we then make them ourselves on top of a no-deal Brexit.”
John McDonnell, the Shadow Chancellor, noted: “With the two Tory candidates trying to outdo each other on who is more likely to pursue a no-deal Brexit, and who can make the largest and most reckless spending commitments, both Johnson and Hunt are putting our economy at risk and can’t be trusted to follow through on their promises to invest.”
Jeremy Hunt and Boris Johnson have said they will use the £26 billion of “fiscal firepower” Philip Hammond has stored up. But the Chancellor has warned them it would not be available if a no-deal outcome happened.
Mr Hunt’s fiscal promises:
*cuts to corporation tax of £13bn a year in short term;
*raise defence spending to extra £15bn in four years’ time;
*£6bn war chest to help businesses cope with no-deal Brexit;
*raise National Insurance Contribution[NICs] threshold to that of income tax-free level costing £11bn a year and
*cutting interest rate on student loans to RPI rate of inflation for adults in England would cost £1bn over time.
Mr Johnson’s fiscal promises:
*tax cut for people earning more than £50,000 a year, costing £10bn a year;
*raising NICs threshold to help those on low pay - no level set but for every £1,000 it is raised costs £3bn a year;
*increase spending on schools by £4.6bn a year and
*£45m to support more free cash machines on High St.
Lord Patten, the former Tory Chairman, added: “All the tax and spending pledges [are] making Labour look like fiscal moderates.”
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