McDonnell under fire over costings for Labour infrastructure borrowing
The shadow chancellor said infrastructure projects would pay for themselves via increased employment and tax revenue.
Shadow chancellor John McDonnell has come under fire for refusing to say how much it would cost to service the borrowing needed to fund Labour’s infrastructure plans.
Mr McDonnell said the financial impact would be “minimal” as the projects would pay for themselves through increased employment and tax revenue.
Pressed repeatedly on how much extra would need to be spent on servicing debt under a Labour government, Mr McDonnell told BBC Radio Four’s Today programme: “The type of journalism where you go into an interview and someone asks you a question on a particular figure, to be honest, is a trite form of journalism.
“That’s why we have iPads, and that’s why I have advisers etc.”
The shadow chancellor said borrowing was needed to pay for essential infrastructure like increased house-building.
He said: “What we would do is ensure that day-to-day spending was not paid for by borrowing. It will be paid for through our tax system, and that means stop the tax giveaway to the rich and the corporations.
“We would only invest for our infrastructure and that investment would pay for itself on the basis of the growth that we would achieve on those. And that’s a one-to-one return.
“Because immediately that infrastructure puts more people back into work, they pay their taxes and as a result of that you are able to cover your costs.”
Economic Secretary to the Treasury Steve Barclay said: “Labour refuse to come clean on how much taxpayers would have to pay for their borrowing binge.
“Labour would add hundreds of billions more to the country’s debt, meaning higher taxes on workers and less money for our schools and hospitals.”
Liberal Democrat leader Sir Vince Cable said: “It’s worrying that the shadow chancellor hasn’t done his sums. Or perhaps he has done his sums and he realises they’re so horrendous that he’s unwilling to acknowledge that his version of a Labour government would put the country into financial difficulties.
“We start from a bad position. The Budget warned of increased borrowing, dependent on the ‘kindness of strangers’. A Labour government focused on massive nationalisation would make things even worse.”