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Just one in 50 people who plan to vote Labour in next week’s general election believes the party would cut public spending if it came to power, according to the latest polling data.
The YouGov survey was commissioned by the Invest in Britain campaign, which calls for greater public investment in the UK, and was launched by the Economic Change Unit, an organisation that promotes new economic thinking.
The campaign said the poll showed “a significant disconnect between Labour’s public investment plans and voters’ expectations”, with current Labour policies suggesting government spending will fall on areas such as new roads, hospitals and schools without tax increases.
A YouGov poll of 2,000 people found that 72% of Labour supporters thought the party would increase public spending if elected, compared with just 2% who thought it would cut it.
Labour’s manifesto includes £8.6 billion in tax increases and £9.5 billion in extra spending, on top of the existing financial plans it inherits from the Conservative government.
But the Institute for Fiscal Studies think tank recently said the impact of these policies would be “very small and will continue to be negligible” and that the manifesto pledges would not prevent a Labour government from leading effective across-the-board cuts to investment spending in the next parliament.
The IFS estimates that under Labour’s manifesto plans, these cuts would reach £13 billion a year by 2028-29. Under a Labour government, public investment as a share of gross domestic product would fall from 2.5% in 2023-24 to 1.8% in 2028-29.
Labour will inherit the austerity regime already planned by the Conservative government, which will see real-terms of day-to-day departmental spending increase by 1% per year.
With a Labour government’s priorities including protecting NHS spending, these plans would effectively mean deep cuts to unprotected departments such as the Justice and Home Office.
The IFS estimates that departmental spending, excluding unprotected departmental investment, will be cut by between £10 billion and £20 billion a year by 2028-29.
Labour leader Sir Keir Starmer said at the party’s manifesto launch that a Labour government could avoid budget cuts if it could achieve rapid economic growth and increase tax revenues.
“If we grow the economy at the same pace as the last Labour government, we will see tens of billions of pounds worth of investment in public services every year,” he said.
But some economists are sceptical of Starmer’s claims and have accused both Labour and the Conservatives of ignoring serious issues about impending spending cuts.
The alternative for Labour is to raise some taxes – the party has not ruled out raising some wealth taxes, such as raising capital gains tax or removing the 100% exemption from farm inheritance tax.
A YouGov poll found that 70% of people polled believe public spending has been too low over recent decades, and 50% think Labour would increase it, while 12% think it would be cut.
Tom Railton, campaigns director for Invest in Britain, said: “Labour has made positive statements about investment but the plans they have put forward still mean huge cuts to public spending which are neither economically credible nor what their own voters want.”
A Labour spokesman said: “Our approach to public spending is based on strong fiscal rules which govern every decision we take in government.”
“Labour will not return to austerity and has pledged to inject immediate funds into public services by closing tax loopholes, reducing NHS waiting lists and putting more teachers in schools,” they added.
