The Cost of Corbyn
I’m very pleased to be here at the Bolton Lad’s & Girls Club.
When I were a lad, you wouldn’t have been able to keep me away from a place like this.
When I was Home Secretary, and a bit more grown-up…
… I saw the impact that Onside Youth Zones had in giving young people “somewhere to go, something to do, and someone to talk to”.
It’s a real comfort to hard-working families to have services like this in the area.
So I’m very proud that one of my first priorities as Chancellor was a £500million Youth Investment Fund.
It was inspired by youth centres like this, and I hope has the potential to leave a legacy just as lasting.
Amazingly, this club was founded 128 years ago.
Back then, Bolton, Bury and Rochdale - where I’ve also been today – had the legacy of being boomtown milltowns.
They’d been the engines of the Industrial Revolution.
With more spinning machines than a general election.
Some of those machines were still whirring in recent memory too.
In the 1960’s, my Dad got off a plane in Heathrow and made his up to Rochdale, to find work in a cotton mill.
After standing outside the mill for weeks, he got his first job, then started a family.
He came up here with a sense of hope and opportunity.
But I know that’s not how everyone in towns like this feel about their future now.
Last night I stayed with family in Rochdale….
… and this morning had the profound experience of walking down memory lane, talking to residents of the street that was my first home.
It’s clear there’s still a lot of pride around here - and there should be.
But it’s also true that too much of that is about the past, rather than the present or future.
It shouldn’t be a surprise that most people here voted Brexit.
They wanted change.
They wanted government to listen.
And now they want to Get Brexit Done…
… and end the dither and delay in parliament.
That’s the only way for their voices to actually be heeded, and to protect the fabric of our democracy…
… and it’s the only way to unlock our politics so we can get on with all the other things that need to change.
That’s not just resonating in towns like this.
I’m visiting every corner of our country during this campaign, and I’m hearing the same thing everywhere.
It’s time to end the paralysis in parliament, bring the country together, and look to the future.
The Conservatives are the only party pledging to do that.
On Sunday we launched our manifesto to Get Brexit Done, and unleash Britain’s potential.
If we are elected by the British people on December 12th, we will pursue a bold agenda.
We will finally leave the European Union in January…
… and get to work on seizing the opportunities from that – including a best-in-class free trade deal.
We will protect the historic Union of the United Kingdom, instead of spending £150million two more referendums, as the Prime Minister has reaffirmed today.
We will boost our public services – building on our record NHS funding, investing in our schools, and putting 20,000 more police officers on our streets.
And we will deliver an infrastructure revolution – probably the biggest our country has seen in decades.
We have a positive agenda for Brexit and beyond.
It’s one of the most ambitious platforms in a generation.
It will change this country for the better…
… improve the lives of workers, families and businesses up and down the country…
… and prepare us for the challenges of the future.
We can choose that clear and responsible path…
… or as I will explain today, we can choose Labour’s fantasy economics…
… a dangerous and disingenuous agenda that threatens to unravel the hard work of the British people over the last decade….
…and hit them with twelve taxes for Christmas.
You can trust in the direction that we will take the country, because our manifesto builds on all of the plans we have already put in train during just over 100 days.
I’m proud of how much our government has achieved under fresh leadership in that time.
And I’m excited by how we can move our country forward in the next few years if the British people put their faith in us.
Our manifesto includes more measures to help working people:
Cutting National Insurance Contributions for working people.
Our major boost to the National Living Wage.
And the Triple Tax Lock – something Labour will not and cannot commit to.
We have already electrified the railway line from Bolton to Manchester, Preston and Blackpool.
At our budget in the new year we will electrify the nation’s ambitions on transport.
From the biggest ever pothole-filling programme…
… to intra-city deals that give city regions like Greater Manchester the funding to upgrade their bus, tram and train services to make them as good as London’s.
And all of this underpinned by a credible set of fiscal rules that will allow us to invest in infrastructure while keeping a lid on debt, borrowing and interest.
We understand that the only way to sustainably fund world-class public services is to maintain economic credibility, and to cultivate a dynamic market economy.
And the policies laid out in our manifesto are the most comprehensively costed that any party has ever published.
We are absolutely committed to being responsible custodians of taxpayers’ money – your money.
Why should you expect anything less?
If you hire anyone, any business, to do a job….
You want to know that they’ll do the job competently…
…that they’ll do what they promised…
… and that they’ll deliver it at the same cost you agreed…
If they didn’t, you’d lose faith in their service.
That principle is even more important in a democracy.
At this election you are putting your trust in the people who are going to run the government and spend your money for up to five years.
They told businesses they had nothing up their sleeves, then announced the biggest share confiscation plan from private investors in the developed world.
They said they’d reached the ‘limit of their ambitions’ for nationalisations, and then announced two more.
They said they weren’t planning a so-called windfall tax, and announced one two days later.
They said they’d fully cost their manifesto….
Not only did they barely bother to pretend to do so, they then announced a new £58billion commitment two days later!
Now, the PM has already pointed out the massive Brexit-shaped hole in Labour’s plans.
That in itself is a huge failure of transparency, leadership and responsibility.
There’s another hole too – a financial blackhole.
You may remember at the start of this campaign we estimated the cost of Corbyn to be £1.2 trillion.
It’s a big number.
It’s hard to comprehend so many zeros.
And it was right for people to interrogate the assumptions in that costing.
Well now they’ve released their final plans, and the direct cost of Corbyn is confirmed.
£1.2 trillion of extra spending over the next five years.
And it could actually be worse than we feared.
If anything it’s an underestimate.
Labour’s costings document shamelessly overlooked many of the commitments in their manifesto.
59 of which don’t have enough detail for us to cost fairly, so we have left those out.
The kindest interpretation you could have about Labour’s approach is that it’s primary school politics not grown-up government.
Rainbows every day and free teddy bears for all.
But it won’t be all gain, no pain.
It can’t be.
You can’t defy basic economic principles any more than you can defy the laws of physics.
Labour would hit ordinary workers and families hard from different directions:
By wrecking the economy.
By hitting lower and middle income earners directly with huge tax hikes.
And by undoing the hard work of the last decade…
… meaning more debt, less wealth creation, and ultimately less money for public services.
First, let’s consider the impact the wider economy has on individual workers and families.
Labour want you to see a big Santa bag of goodies.
But the closer you look, it’s just a big bag of coal.
This Labour manifesto is a recipe for disaster.
What would that look like?
I’ll tell you how that would play out.
Imagine the nightmare on Downing Street on Friday 13th.
The pound crashing in the early hours of the morning as Corbyn inches toward a majority...
Foreign investors rushing their money out of the country in fear of exchange controls...
A dramatic downgrade of government debt credit ratings…
And the cost of our debt spiralling out of control as confidence in the British government collapses.
All that means it won’t even take months and years for an economic crisis.
It’ll happen in days and weeks.
A crisis by Christmas.
And who will pay the price for this?
Families up and down the country.
When an economic downturn comes, it’s never the rich that take the biggest hit.
They have their buffers and financial safety nets.
It’s people on low and average earnings that pay.
Fewer jobs, lower wages and higher prices.
Higher interest rates will increase mortgages.
Pension pots will be slashed.
So before they’ve even had a chance to implement their ideological experiments, a Corbyn government will already be a risk most people cannot afford.
Secondly, Labour will hike taxes on the many, not the few.
They talk about soaking the rich, and try to scare people about billionaire bogey-men.
It’s all so simple they say.
And they try to distract people with impressive sounding headline spending figures.
But the ‘ying’ to that ‘yang’ is the cost it will exact on ordinary voters.
Labour’s numbers only add up with significant tax rises for the 95%, not just the 5.
They say they want to raise £83bn in new taxes every year.
As Chancellor I can tell you, you can’t simply raise that amount of money from such a small group of people.
But it’s worse than that because there’s currently an £385bn financial hole in Labour’s plans.
And that means tax hikes on hard-working families on lower and middle incomes, like many of the proud people of Bolton.
“It’s ludicrous to suggest that Labour could fund its ever-growing and expensive wish-list simply with tax rises on just a tiny number of very wealthy people.
Because it will be ordinary families who will end up paying.”
Those last few sentences were not my words, but those of a man who was Labour’s Shadow Chancellor just four years ago.
And if that wasn’t enough, the Institute of Fiscal studies are unequivocal about Labour’s claims that they can raise £83bn from the highest earners:
“That is simply not credible.
Labour is wrong to say their spending spree can be paid for by one segment of society – everyone will pay.”
As they, the left-leaning Resolution Foundation and others have confirmed…
… Labour will have to raise taxes on low and middle incomes to come anywhere close to meeting the shortfall.
So which taxes will it be?
There at least six confirmed tax rises they’ve hidden away that will hit people hard:
The Marriage Tax….
… removing an allowance so families lose £250 a year.
A stealth tax on drivers…
… hiking the cost of petrol by 16p/litre.
A stealth tax on heating…
… increasing the energy bills of 24 million households heated by gas.
Higher Inheritance tax…
… reversing our previous cut.
The Pension Tax….
… reducing pensions by £11,000, hitting up to 10 million savers.
And the Small Business Tax…
… adding a £5000 bill to 1 million small business owners.
But that’s just the ones that they have baked into their plans.
Unless they find that magic money-tree in the next couple of weeks, they’re going to bring in the biggest tax hike of modern times.
At least £2400 per person.
That’s got to come from somewhere.
Based on the numbers and Labour’s previous statements, I can tell you today some of the taxes Labour will consider raising, to make up the shortfall:
Removing the Personal Allowance.
A Homes Tax.
A Movers Tax.
Higher Fuel Duty.
As tax bombs go, that has a very heavy payload.
You can see the details of the twelve taxes of Corbyn on CostOfCorbyn.com
They may reject one of these – and if they do they need to be honest – what other tax would they raise instead?
Whatever their answer, it’s clear that after all the hard work of the last nine years to recover from the last Labour crisis…
Corbyn and McDonnell will take us back to square one – and then back even further.
My politics was formed watching the Nine O’Clock News with my dad, during the Winter of Discontent.
We’ve made so much progress as a country since then that it’s hard to comprehend going back to that.
But we must confront ourselves with that stark reality.
If enough people fall for the Labour spin in the next two weeks, the inconceivable really is conceivable.
This is not an election we wanted to have.
We wanted to get Brexit done and get on with the people’s priorities.
But it does give us the opportunity to say no to divisive politics…
….no to dither and delay…
… and no to the destructive economics of the 1970s.
Instead we can say yes to getting Brexit done by January, yes to keeping taxes down, and yes to building a bright post-Brexit future.
A clear vision and ambitious plan to achieve it.
I want all parents to truly believe that the next generation – like the kids who use this youth centre – can have a better quality of life than they did.
That’s the promise of our manifesto:
Unleashing their potential.
And unleashing Britain’s potential.