Rachel Reeves ‘£4,800’ mortgage claim is a house of cards

Labour’s Rachel Reeves has scored some political points this week by claiming that the Conservatives have made £71 billion of ‘unfunded policy pledges’, and that this will ‘mean £4,800 on your mortgage’. These calculations are simply absurd and easy to knock down.

Let us start with the ‘£71 billion’. This figure first appeared in a Labour document, called ‘Conservatives Interest Rate Rise’, published in May. It was claimed then that annual borrowing would be £71 billion higher in the final year of the next parliament (2029-30), based on Labour’s costings of the Conservatives’ alleged plans.

However, this analysis unravelled when the Conservatives actually published their manifesto. In particular, Labour’s original costings for 2029-30 included £46 billion for the complete abolition of National Insurance (NI). In the event, the manifesto only committed to scrap NI for the self-employed, and to another 2p cut for employees. The rest would only follow ‘when we have a way to fund it sustainably, consistent with getting debt and borrowing down’.