Labour policies would cost a 3p rise on income tax

Uncosted Labour spending pledges would cost the equivalent of a 3p rise in income tax, according to an analysis.

The i newspaper said the party’s policies would require an additional £20 billion of funding. The analysis includes the cost of a policy raised by the shadow education secretary to extend free childcare to children  below the age of 11.

On Wednesday night, Labour disputed that this was party policy – and denied that the cost of its policies would need a large rise in income tax.

But Jeremy Hunt, the Chancellor, tweeted: “It is just not possible for Labour to promise so much extra spending without pushing up taxes, inflation and interest rates.”

Shadow chancellor Rachel Reeves has promised that Labour’s spending would be fully costed.

The i newspaper said the policies suggest they would need income tax rises of 3p beyond that already promised through small tax increases such as imposing VAT on private school fees and ending non-domiciled tax status.

The IPPR think-tank estimates the cost at almost £18bn, although taking into account the Government’s own childcare plans announced at the last Budget the net cost would be more like £13.6bn.

The pledge to increase the foreign aid spending target to 0.7 per cent of GDP, after Rishi Sunak cut it to 0.5 per cent, would cost around £5.5bn; party sources say this will only be implemented when it is affordable to do so.

Labour has promised to set up a £1bn “contingency fund” for the energy industry, and would also have to spend around £1.7bn on GPs’ salaries if it went through with plans by shadow health secretary Wes Streeting to nationalise the network of family doctors in England – something which the party now says it will not do.

The party will struggle to meet its spending promises without raising taxes, the head of the Institute for Fiscal Studies (IFS) has warned.

Sir Keir Starmer has promised not to borrow for day-to-day spending, and to bring down the size of the overall public debt pile as a percentage of GDP.

Other current spending commitments which would total less than £1bn each include increasing the number of mental health workers, recruiting more police officers and setting up breakfast clubs in every primary school.