Sir Keir Starmer has criticized Rishi Sunak over Tory claims Labor will raise taxes by £2,000. Photo: Jonathan Hordle/ITV
Labor has been accused of spinning fact into fiction when it claims mortgages would rise by £4,800 under the Tories.
Rachel Reeves, the shadow chancellor, said Rishi Sunak would have to borrow an extra £71 billion next year. parliament to fund his party's spending plans, forcing the Bank of England to raise interest rates.
Revealing a dossier of what she claimed was the economic impact of the manifesto, she called the increase «a second Tory mortgage bomb», adding £4,800 over five years.
But the Conservatives made claims, with a spokesman saying: “Once again, Reeves is confusing fact and fiction with the numbers.”
The row follows days of rows over the Tories' claim that taxes need to rise by more than £2,000 on every working household to compensate for the £38 billion black hole in their spending plans.
Sir Keir Starmer accused Sunak of lying, and the figure was criticized by the UK statistics office.
Speaking after the release of the Tory manifesto, which set out a £17.2bn tax cut package including a further 2p cut to staff National Insurance, Ms Reeves laid out what appeared to be her party's equivalent of a £2,000 claim.
She said the Conservative manifesto contained tens of billions in unfunded liabilities and could lead to a «second mortgage shock for the Tories» as the parties continued to clash over tax and spending.
Ms Reeves previously said her party's analysis showed the Tories' spending plans would require an extra £17.4bn of borrowing in 2029-30 and a total of £71bn over the entire five-year period.
“Second mortgage bomb from the Conservative Party”
The shadow chancellor added that £12 billion of welfare savings had either already been accounted for by the Office for Budget Responsibility or could not be provided.
Comparing the impact of Mr Sunak's plans with those of his predecessor Liz Truss, Mr. Ms Reeves said: “The consequences of increasing daily borrowing to fund the commitments made in this manifesto would amount to a second Tory mortgage bomb because higher borrowing on that scale would force the Bank of England to raise interest rates.
“The result will be an increase in average mortgages totaling £4,800 over the course of this Parliament.”
< p>She later added: “As for the plans in this Tory manifesto, the money is simply not there. And this will mean your mortgage will increase by £4,800. Pretending that this is not so is dishonest and irresponsible.
“There is no money. That's why this will lead to more borrowing and therefore more mortgage bonds worth £4,800.»
The Labour Party has said mortgages will rise by £4,800 under the Tories. Photo: Mike Kemp/In Pictures via Getty
Asked if she was guilty of exactly what the Tories are accused of, namely picking the scariest figures, she said: «We took a very conservative view, we only took what was actually in their manifesto.»
Labour's analysis makes a number of assumptions to estimate the costs that could be associated with Tory policies.
A Conservative spokesman said: «Rachel Reeves' chaotic and alarmist dossier is full of utter nonsense and culminates in extraordinary claims that cutting the civil service to pandemic levels will cost taxpayers £5.7 billion.»
Labour is set to release its own manifesto on Thursday.
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