Do Labour's sums add up?

The party’s manifesto is light on detail but it does pledge to not raise taxes while also cutting debt, writes James Moore

- James Moore

In its manifesto, Labour has correctly identified a key problem: lack of economic growth. Britain desperately needs more of it to properly fund public services while preventing taxes from soaring rapidly.

But while spotting the problem is easy enough, fixing it is another matter. How does Labour’s manifesto measure up as a form of treatment for this fiscal malaise? The answer is mostly “umm, err...” because the 130-plus pages are deliberately light on detail, with lots of talk about strategising and new agencies that will be, well, strategising.

Keir Starmer has made a firm promise not to increase income tax, national insurance or VAT for “working people” and to freeze corporation tax at 25 per cent. The first claim is more than a little disingenuous at the outset, unless earning just over £50,000 takes you out of the “working people” category because the freeze on tax thresholds will continue, placing more and more workers in the 40 per cent tax band as wages rise. This “fiscal drag” is an income tax rise by another name.

There is a welcome recognition that the economy needs more investment, a long-term problem that has held it back. There will be some input from the government, but don’t get overexcited. For example, the scaled-back “green prosperity plan” will now top out at £5bn a year.