Keir Starmer's spending plans would cost the equivalent of a 3p income tax rise trends now
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Labour's spending plans would push up taxes, inflation and interest rates while costing the Treasury an extra £20billion a year, Chancellor Jeremy Hunt warned yesterday.
The Opposition's policy pledges – which include extending free childcare to all those aged 11 or under and increasing foreign aid spending – would cost the equivalent of a 3p rise in income tax, analysis suggests.
Shadow chancellor Rachel Reeves has promised in the past that every Labour policy announcement 'will be carefully costed and fully funded'.
But experts, including the head of the Institute for Fiscal Studies, said the party may need to raise taxes or borrow more to fulfil its promises in government.
Mr Hunt, who has made reducing inflation one of his key goals, said: 'It is just not possible for Labour to promise so much extra spending without pushing up taxes, inflation and interest rates – as the IFS says in this powerful analysis.
Jeremy Hunt has made reducing inflation one of his key goals
Any sensible economic policy needs one simple goal: get inflation out of the system and do so as soon as possible.'
Labour has promised to raise funds for its policies by imposing VAT on private school fees and ending the non-domiciled tax status. Officials believe the latter will raise up to £3.2billion.
But IFS director Paul Johnson said increasing revenues
