Tories set to cost Treasury more than £100 billion in next parliament

The Tories are intent on undermining Labour’s credibility on the economy but they’re ignoring the fact that their own record isn’t so great.

In fact, if wages continue to grow below the amount forecast, as they have under the Coalition, the Treasury will lose more than £100 billion in the next parliament.

Since 2010, income tax receipts and national insurance contributions have been 6.9% lower than expected, amounting to a loss of £95billion.

These figures have been released ahead of the Commons vote today on the Coalition’s charter of fiscal stability, which sets out the economic goals for the next parliament.

The Tories line reads that if Labour votes for this deficit reduction plan but refuse to commit to the same high level of spending cuts, they are indirectly saying they will increase taxes or borrow money.

However, Balls’ argument stands that if Labour support the economic plans in the charter, they will do so only if 2017-18 is not a fixed date by which the deficit is eliminated. This would allow Labour to plan for a fairer way of ‘balancing the books’ by eliminating it on a rolling three-year programme.