The shadow chancellor, John McDonnell, has said Labour would reverse cuts made by the government since 2010 as Labour highlighted more than £108bn needed to “end austerity”.
Labour’s pre-budget review said it would take £42bn to reverse departmental spending cuts. The Institute for Fiscal Studies (IFS) had already highlighted another £19bn needed to stop further cuts to government.
Some £33.5bn would be required to reverse cuts to social security and social care, Labour said.
McDonnell pledged to increase spending on the National Health Service, adult social care, and schools, at a speech in London to business and trade union representatives.
Earlier this month the prime minister, Theresa May, also said she would end the policy of austerity instituted by her predecessor David Cameron and continued by the current government. May told the Conservative party conference: “After a decade of austerity, people need to know that their hard work has paid off.”
However, policy experts have highlighted that the government’s pledge leaves room for manoeuvre.
The £19bn bill calculated by the IFS, a non-partisan thinktank, would be needed to prevent further cuts in spending to government departments whose budgets are not protected, under one definition of “ending austerity”.
The Resolution Foundation, which focuses on living standards, has asserted that another £1.5bn in cuts to working-age benefits are still due to take effect in April 2019.
McDonnell said expected spending increases trailed by the Conservatives ahead of the budget would not be “anywhere near” enough to reverse austerity.
Labour’s analysis claims the government will have to take “large-scale action” to end austerity, which it defines as reversing all spending cuts made since 2010, when the Conservatives gained power. The £108.2bn total cost to end austerity, according to Labour’s yardstick, also includes education, local council and affordable housing spending.
McDonnell acknowledged in an interview with the BBC on Thursday that a Labour government would have big spending commitments, funded at least in part through higher income tax on the top 5% of earners, increasing enforcement of tax avoidance and evasion, and raising corporation tax.
Labour’s analysis said Conservatives “corporate tax giveaways” were worth £110bn, although the IFS has previously questioned whether increases in corporation tax would recoup the amount Labour believes it would.
The party will have an alternative budget ready to be implemented “as soon as we go into power”, McDonnell said, with “detailed, costed proposals” ready for the next general election.
McDonnell dismissed revisions to economic forecasts, which are expected to give the government more breathing space in the budget, as an “accountancy adjustment exercise”.
The Office for Budget Responsibility is expected to reveal a £13bn increase in the headroom for the chancellor, Philip Hammond, as he aims to fulfil May’s austerity pledge.
The budget, which takes place on Monday, two days before Halloween, will be “more trick than treat”, said McDonnell, who was sporting a gash on his head after tripping over some fly-tipped rubbish on the street.
