Sunak 'failed to learn' from Truss as Labour blast £46bn unfunded tax cut plan

09 March 2024 , 19:19

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Labour accused Rishi Sunak of repeating Liz Truss' mistakes - that cost the country dearly (Image: NEIL HALL/EPA-EFE/REX/Shutterstock)

Rishi Sunak has “failed to learn from Liz Truss”, Labour said after top Tories floated an unfunded plan to scrap National Insurance which could send mortgage rates skyrocketing.

The tax currently raises £46billion - a billion more than the tax cuts announced by the party’s disastrous former PM.

Both Chancellor Jeremy Hunt and Treasury minister Bim Afolami have suggested NI could be for the chop if the Tories win the election.

But they won’t say when they’d scrap it or explain how they would pay for it, leaving a potential £230billion financial black hole in five years of the next Parliament.

Darren Jones, Labour's Shadow Chief Secretary to the Treasury, warned if mortgage rates increase as much now as they did in the period around Ms Truss kamikaze mini-budget, rates could spike by up to 2.4%.

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That would leave mortgage holders up to £312 worse off a month.

He said: “The Conservatives clearly haven't learned anything since Liz Truss sent people's mortgages spiralling, with the Chancellor just this week floating unfunded plans that would leave a £46 billion black hole in the public finances.

“ Labour have iron-clad fiscal rules that will guide how we spend taxpayers' money and we will never make unfunded promises like the Tories recklessly do."

A family buying the average UK house would pay £1,216 at current rates.

But Labour’s analysis suggests these could explode by an additional £312 to £1,529 a month in a ‘mini-budget style’ scenario.

Such a repeat would see interest rates rise from their current level of 4.73% to a massive 7.13%.

“Mortgage holders across the country are already worse off because the Conservatives crashed the economy with families paying the price through more expensive mortgage payments, higher bills, and rising prices in the shops, Mr Jones added.

“Only Labour has a plan to grow the economy to boost wages, bring down bills, and get Britain’s future back.”

Mikey Smith