Fact check: £23.36bn in Sunak tax claim does not come from civil service figures

Prime Minister Rishi Sunak has said his claim that Labour would put up taxes by £2,000 per household was based on calculations from the civil service.

In a debate on ITV he said: “Independent Treasury officials have costed Labour’s policies and they amount to a £2,000 tax rise for every working family.”

Evaluation

This figure was based on a document compiled by the Conservative Party. Some of the figures that were used in that document came from civil service calculations.

Those calculations were performed by civil servants using directions provided by politically appointed advisers – so called special advisers. The civil service at the time raised concerns about some of the directions they had been given.

The cost ranges provided by the civil service have been inconsistently chosen for inclusion in the document.

The top civil servant at the Treasury has said that civil servants “were not involved in the production or presentation” of the document or the total figure that it produced.

Five or six of the 27 policy costings in the document were not based on assessments from the civil service.

The facts

A document published by the Conservative Party claimed that Labour had promised policies which would cost around £58.91 billion over four years, while only raising £20.38 billion in the same period.

Therefore, the document said, there is a hole of £38.53 billion that will need to be funded somehow.

It then divides that figure by 18.4 million working households to come up with the cost per household over four years – assuming the hole is filled with tax rises.Does the document say that Labour will put up taxes by £2,000?

No. Raising taxes is one of the options in the document. The document claims that Labour would either have to borrow more money to fund what it claims is a £38.53 billion hole, or raise taxes.

The document says that it could mean an increase in VAT, national insurance or income tax, but that is only one of the options.

If the document’s figures are accurate how much could taxes go up? 

If the figures are accurate, and a Labour Government decides to fund that shortfall with tax rises, then that could cost an average of £523.50 per household per year. That would be £2,094 over four years.

What has the civil service said about the figures?

James Bowler, the Permanent Secretary to the Treasury, said in a letter dated June 3 that civil servants “were not involved in the production or presentation” of the document “or in the calculation of the total figure used.”

Writing to Labour’s Darren Jones, Mr Bowler said: “In your letter you highlight that the £38bn figure used in the Conservative Party’s publication includes costs beyond those provided by the Civil Service and published online by HM Treasury.

“I agree that any costings derived from other sources or produced by other organisations should not be presented as having been produced by the Civil Service.”

He did not say the figures are wrong, just that not all of them were produced by the civil service.

What did the civil service actually look at?

The officials do not appear to have analysed all the policies contained in the document. All the policy costings that civil servants looked at are published on the Government’s website.

The document says “almost” every costing has been conducted by HM Treasury.

According to PA news agency analysis, out of the 19 spending commitments that the document says Labour has made, the civil servants analysed 16 of them, but did not analyse three.

The costs the document lists of the 16 analysed policies add up to around £35.55 billion. The costs of the three that were not analysed total around £23.36 billion.

Out of the eight Labour policies that could raise revenues, civil servants looked at six. In one of these six, the figures the civil service has provided – those on the oil and gas windfall tax – were not used in the Conservatives’ document, likely after updates to the policy.

The six they examined would raise around £8.68 billion and the two not examined would raise £11.70 billion.

If taking only the figures examined by civil servants, that would leave a shortfall of £26.87 billion, not £38.5 billion.

When civil servants have given a range of possibilities, which figure has the document chosen?

The document has not been consistent on this.

On the policy for 8,500 more mental health professionals the document uses the lower end of the range provided.

In another policy – Labour’s plan to bring back the family doctor – the document uses the midpoint of the range the civil servants provided.

On Labour’s plan for free breakfast clubs in every primary school the civil servants produced a range for providing that over four years which goes from a low of £587 million to a high of £4.45 billion. The document uses the £4.45 billion figure.

The document uses the lower end of the £91 million to £114 million per year range for a £2,400 teacher retention payment.

Have civil servants included any disclaimers in their calculations?

The documents published by the Government, which have been produced by civil servants, contain several disclaimers.

In four of their papers the civil servants said: “The nature of this costing is uncertain and is driven by assumptions provided by Special Advisers.”

Ten of the documents contain some version of the following statement: “This note sets out the costs of the delivery of the policy, it does not include estimates of any benefits or potential cost savings that may flow from it.”

One of the papers is about Labour’s policy to “insource” functions that the Government currently relies on companies to provide.

The political advisers told the civil servants to assume that services are 7.5% less efficient when insourced. Based on this, the civil servants estimated a cost of £6.46 billion over four years.

But the civil servants warned: “The 7.5% assumption has been used as directed by special advisers, but we have low confidence in this because the difference between the cost of outsourcing and in-house delivery is highly circumstance specific.”

The 7.5% figure is extrapolated from an Institute for Government (IFG) report. The civil servants said: “This assumption is based on the IFG’s analysis of a small number of recent projects (which are not specified or outlined in the report).”

One of the authors of the IFG report has called the methodology a “very dubious way of costing Labour’s insourcing pledge.”

Links

Sunak v Starmer: The ITV debate

Conservatives – Labour’s Tax rises (archived)

Post on X with letter from James Bowler (archived)

Opposition Policy Costings 2024 (archived)

Opposition policy costing – 8,500 Mental Health Professionals – Labour (archived)

Opposition policy costing – Bringing back the family doctor – Labour (archived)

Opposition policy costing- Breakfast Clubs- Labour Party (archived)

Opposition policy costing – Teacher retention – Labour Party (archived)

Opposition policy costing – Oil and Gas Levy – Labour Party (archived)

Opposition policy costing- Business Rates for Private Schools- Labour Party (archived)

Opposition policy costing – Non-resident SDLT – Labour Party (archived)

Opposition policy costing- VAT for Private Schools – Labour Party (archived)

Opposition policy costing – Oil and Gas Levy – Labour Party (archived)

IfG’s Nick Davies on X (archived)