- Labour’s plans on infrastructure, welfare, employment legislation, tuition fees and shale gas could cost every household nearly £17,500 in just one parliamentary term (see Table 8).
- Their infrastructure plans alone could lead to a cost over £14,000 per household over the parliamentary term (see Table 2).
- Their pledges on employment legislation could lead to the loss of 1.3 million jobs by 2024/25 and cost the UK Treasury over £10bn a year by 2024/25 (see Table 4).
- The pledge to end tuition fees could cost over £50bn over the parliamentary term (see Table 5).
- The proposed ban on fracking could hit Treasury revenues and add over £9.5bn to Britain’s trade deficit over the parliamentary term (see Tables 6 & 7).
In 2010, the UK’s budget deficit was the highest in the western world as a proportion of GDP, equating to nearly £200 billion. Since then, significant progress has been made in reducing the budget deficit, helping to shield the UK from turbulent economic times. It is, of course, hoped that this progress will continue for the remainder of this Parliament.
However, the danger now is that, if implemented, some of Labour’s economic and welfare proposals would undo much of this progress. While a Labour government may seem unlikely today, turbulent political times mean that anything is possible. Bookmakers still offer 6/1 on there being a Labour majority at the next general election. So it must be useful to try to estimate the effect of those Labour economic plans which have been put forward so far.
This paper examines Labour’s proposals in five areas:
- employment laws
- tuition fees and
- a ban on fracking
Obviously, as with any long-term estimate, a degree of caution is required as there will inevitably be much uncertainty. But these spending pledges alone could cost every household in the UK £17,500 in just one parliamentary term (see table 8 in appendix). There may, of course, be more spending commitments made by the Labour Party over the coming years, which could add to the potential burdens for UK taxpayers.
Daniel Mahoney and Tim Knox - Friday 28th October 2016