LABOUR have been accused of trying to “cook the books” after claiming their economic plans would make people £500 better off annually.
Research has found that the UK Government’s £14 billion cuts package will leave the poorest £500 a year worse off, mainly due to fresh benefit cuts for disabled people.
But the party faces separate questions over Rachel Reeves’s claim during the Spring Statement on Wednesday that her plans meant that “on average” people would have more money in their pockets.
In the Office for Budget Responsibility’s (OBR) Economic and Fiscal Outlook document, the public spending watchdog set out how this figure had come about.
Real disposable household income is projected to rise by 0.5% per year until 2030, the forecaster said.
While benefit cuts would drive down disposable income, this would in general be offset by a predicted boom in housebuilding and rising productivity which should boost wages, the OBR said.
But it also said that “a larger housing stock means more compensation for housing services”, which it goes onto explain would mostly be fuelled by “imputed rent”, or what homeowners would get if they rented out property.
The report added: “This makes the boost less tangible for households.”
Labour's claim appears to rest on the assumption that more houses being built would result in more rental income – and that this would be shared across the board, rather than concentrated in the hands of landlords.
The party have been accused of trying to “spin” the figures.
Collette Stevenson, convenor of Holyrood’s social justice committee, said: “While Labour cook the books to claim people will be £500 better off under their plans – a new report from the Resolution Foundation shows the poorest households will in fact be £500 worse off thanks to Labour's Spring Statement.
“The UK Government talks a good game – but the reality is the Government’s own analysis shows their welfare cuts show will push 250,000 people into poverty, including 50,000 children.”
Greens co-leader Patrick Harvie (above) added: “No amount of spin can hide the fact that Labour has chosen to plunge hundreds of thousands of people into poverty. No matter what weasel words they choose, the impact of their cuts will be more people and families suffering.
“Their devastating cuts and inability to show even a shred of compassion for vulnerable people already being pummelled by rising costs of living will leave a terrible legacy.
“It is a legacy that could be completely avoided if only they made different choices by taxing the super rich and supporting those living in poverty rather than scapegoating and dehumanising them further.”
The UK Government was approached for comment.
