Labour have doubled down on plans to increase the size of the state

Commenting on the 2019 Labour Manifesto published today (Thursday), Torsten Bell, Chief Executive of the Resolution Foundation, said:

“Labour’s 2019 Manifesto has doubled down on their plans to increase the size of the state. The £70bn of spending increases they proposed two years ago has now risen to £135 billion.

“This would take the size of the state to a post-war high, outside of recessions, of 45.1 per cent. This spending increase would be comparable to the first Wilson government, and would mean the UK having a bigger state than Germany.

“These ambitious spending pledges are matched by equally ambitious revenue-raising plans. While attention has previously focused on plans to raise income tax for the top 5 per cent, that change will now raise just 6 per cent of the additional £83 billion of tax revenue raised.

“Much more important is a new £14 billion plan to raise taxes on capital gains and dividends. There is a strong case for higher taxation of capital gains, including closing unjustified reliefs such as Entrepreneurs’ Relief. However, the scale of the increase planned means effects will be felt by many people well below the top 5 per cent, including those with pension savings.

“While there is now a new political consensus over the need to end austerity and increase both borrowing and spending, today’s Labour Manifesto shows there is a very big choice facing the country on the size of the state they want, and how it should be funded.”