SHAMBOLIC Tory incompetence has left a £3 billion black hole in the public finances over the summer, Labour warned yesterday.
Labour called on Chancellor Philip Hammond to rule out tax rises that would hit ordinary families to plug the gap created by successive economic failures.
The party made the demand amid reports that Mr Hammond plans to raise income tax, VAT and national insurance contributions for low- and middle-income earners in his autumn Budget.
Labour said that the £3bn shortfall does not include the unfunded commitments made in the “uncosted Tory manifesto” and could be set to rise.
It highlighted a number of contributing factors to the enormous gap in the public coffers.
Following public-sector union Unison’s stunning legal victory in the Supreme Court last month, the government was ordered to repay up to £32 million in unlawful employment tribunal fees which it introduced in 2013.
Tory plans were further hit by Mr Hammond’s spectacular U-turn on plans to increase national insurance contributions after widespread opposition and anger following his spring budget announcement.
And in a desperate attempt to cling on to power after losing their parliamentary majority, the Tories handed £1bn to the reactionary Democratic Unionist Party to prop up Prime Minister Theresa May’s government in a confidence and supply agreement.
In a letter to Mr Hammond, shadow chief secretary to the Treasury Peter Dowd highlighted concerns over plans to increase taxes to “cover the £1bn costs of your deal for Democratic Unionist Party votes.
“In addition to the £2bn costs of your reversal of planned rises in class-four national insurance contributions and the £32m costs of your government’s employment tribunal fee cuts being declared illegal, a black hole of more than £3bn has been created in the public finances.”
The letter warned of a “significant uncertainty” over Mr Hammond’s plans to close the “enormous gap in public finances.”
With household budgets squeezed by falling pay, the letter asked for reassurances that “ordinary families will not bear the brunt of your government’s successive failures.”
Mr Dowd said: “Labour are calling for a guarantee that taxes will not be raised on low-and middle-income earners to pay for this government’s shambolic leadership.”