The facts about Sunak's disputed '£2,000 Labour tax rise' claim

Rishi Sunak claimed numerous times during the election debate that people would be £2000 a year worse off under the Labour party

Labour Party leader Keir Starmer and Conservative Party leader and Prime Minister Rishi Sunak debate, as ITV hosts the first head-to-head debate of the General Election, in Manchester, Britain, June 4, 2024 in this handout image. Jonathan Hordle/ITV/Handout via REUTERS
Keir Starmer and Rishi Sunak clashed about taxes during their first election debate. (Reuters)

Rishi Sunak has insisted he did not lie about Labour's tax plans during his first election debate with Sir Keir Starmer

In his first TV interview since Tuesday's debate, Sunak branded Labour's accusations "desperate", saying: "They are obviously very rattled".

Sunak claimed numerous times during the hour-long debate that people would be £2,000 a year worse off under the Labour Party as a result of proposed tax hikes.

The Tories claimed that their figures had come from the civil service - but a top Treasury official subsequently said the figure quoted by Sunak should not be presented as "having been produced by the civil service".

The row prompted the statistics watchdog, the Office for Statistics Regulation, to issue a statement suggesting the Conservatives had failed to make clear their calculations.

Here's what we know about the row so far:

“Beyond raising your taxes and raiding your pensions, no-one knows what Labour would actually do," Sunak said in his opening statement during the ITV debate on Tuesday night. “Handing Labour the keys to No 10 would hit every working family with a £2,094 tax bill, punish pensioners with the retirement tax, bring in an amnesty for illegal immigrants and take our country back to square one.”

He went on to repeat the £2,000 figure a number of times during the debate, telling voters: "If you think Labour are going to win, start saving”.

"Keir Starmer is going to raise taxes, but that’s just the start because there’s a long list of other things that he needs to find the money for. So it’s not just going to start and stop there, there are £2,000 worth of tax rises coming for every working family in this country," he said.

After the debate, in an interview with ITV, Sunak insisted he hadn't lied. Asked: "Are you willing to lie?", he replied: "No", adding: "I think its pretty desperate stuff and Keir Starmer and the Labour Party are obviously very rattled that we’ve exposed their plans to raise tax on people."

Challenged on whether his claim was "dubious", the prime minister said: "I think people know that I'm across the detail when it comes to numbers".

The Labour leader took his time in shooting down Sunak's comments, allowing the £2,000 figure to be repeated about a number of times before telling the prime minister the claims were "absolute garbage".

Starmer said his plans had been fully costed, sarcastically referring to Sunak as “the British expert on tax rises”.

He accused the prime minister of making "unfunded tax cuts" like his predecessor Liz Truss, stating: "This £2,000 he keeps saying it’s going to cost is absolute garbage. This election is all about a choice. More of the chaos and division we’ve seen for the last 14 years or turning the page and rebuilding with Labour."

Later following the debate, Starmer said the prime minister’s “made-up” claim had given an “insight into his character” and suggested he had broken the Ministerial Code by lying.

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.

Challenged on the claim in the ITV interview, Sunak said: "There are 27 different policies that go into this number, 21 of them have been costed independently by Treasury officials - they're all online and people can find them - two of them come direct from the Labour Party, three of them from other public government sources and one of them's from an independent investment bank. That's where all the workings come from.

Asked whether the numbers were instead based on assumptions drawn up by Tory advisers, Mr Sunak said: “No. The analysis and the working is done by Treasury officials.”

The Conservatives claimed that the £2,000 figure touted by Sunak during the debate was based on work by Treasury civil servants.

But it since emerged that the Treasury's permanent secretary James Bowler had written to the Labour Party clarifying that the £38.5 billion total for Labour policies - which the Tories claimed would result in tax rises totalling £2,094 per working household - “includes costs beyond those provided by the Civil Service”.

“Costings derived from other sources or produced by other organisations should not be presented as having been produced by the Civil Service,” he said in a letter to shadow Treasury chief secretary Darren Jones. I have reminded ministers and advisers that this should be the case.”

In a statement on Thursday, the Office for Statistics Regulation - which previously warned political parties to use figures appropriately during the campaign - suggested the Conservatives had failed to make clear their calculations.

“Without reading the full Conservative Party costing document, someone hearing the claim would have no way of knowing that this is an estimate summed together over four years,” the statement read. “We warned against this practice a few days ago, following its use in presenting prospective future increases in defence spending.”

Just how much will Labour's plans cost the taxpayer? While the Labour Party insists its plans are fully costed, a full manifesto has not yet been released so there is no way of knowing whether its budget will cut from existing areas to prop up its pledges, or whether this burden will fall on the taxpayer.

It is also not clear whether Labour's plans would cost the taxpayers more than the Conservatives' plans - particularly those that have recently been announced (including rolling out compulsory national service and triple lock plus pensions).

There has also been no clear word on where the Conservative costing not produced by civil servants came from.

The £2,000 tax row hides an uncomfortable allegation levelled by some experts at both main parties - that both Labour and the Conservatives are “avoiding the reality”.

According to the Institute for Fiscal Studies (IFS) neither of the main parties appears “serious about the underlying principle of getting debt falling” and both sets of plans would lock them into “sharp” spending cuts after the election.

In its assessment of campaigning, the IFS said forecasts suggest whoever is the chancellor in the autumn will be “fortunate” to meet the fiscal rule of getting debt on a downward path between 2028/29 and 2029/30, which both Labour and the Conservatives have committed to.

The think tank added that, while there are “good reasons” to want debt falling over the medium term, it described the current “fiscal mandate” as “arbitrary and gameable”.

This makes it a “poor guide to the health of the public finances”, the IFS said.

Meanwhile, the Resolution Foundation said the “narrow” focus by the main parties on spending pledges risks distracting from the “bigger question” of how they would manage the uncertainties facing the public finances.