Conservative minister warns of large fiscal gap under Labour budget
Select a version of the text written from a presumed ideological perspective. This is not the original text, but a hypothetical version — how someone with that viewpoint might have phrased it. Tapping the current version again will return to the original or select cleaned version.
Kemi Badenoch said Labour's spending plans could create a £49 billion shortfall, with households potentially facing tax increases of about £1,700 by 2030-31.
Conservative business secretary Kemi Badenoch told the Telegraph that the Labour government’s budget proposals could leave the public finances with a £49 billion gap, a stark warning that underlines the fragility of the party’s spending plans. She said the shortfall would force an average household tax rise of roughly £1,700 per year by the 2030-31 fiscal year.
Badenoch criticised Chancellor John Healey for failing to set out a clear plan to meet the defence spending target of 3 percent of GDP, suggesting an £11 billion deficit in that area. She also pointed to the estimated costs of a National Care Service (£3.5-17 billion a year), a council-housing programme (£4 billion annually) and extra departmental spending of about £17 billion needed to avoid real-terms cuts.
The Office for Budget Responsibility noted that several Labour proposals lack final details, making precise cost estimates difficult. It said the fiscal impact of a National Care Service depends on its final design and could range between £3.5 billion and £17 billion each year.
The Institute for Fiscal Studies estimated that meeting defence, council-housing and other departmental pressures would require an extra £28 billion, including £11 billion for defence, £8 billion to offset higher inflation and £9 billion to prevent real-terms cuts.
Labour’s shadow chancellor, Andrew Griffith, responded that the country faces a fiscal challenge and warned against higher taxes and borrowing. A Treasury spokesperson dismissed the Conservative analysis as “fiction”, insisting that the budget complies with fiscal rules, fully funds defence plans and keeps borrowing on a downward trajectory.