Sir Keir Starmer has accused Chancellor Jeremy Hunt of “admitting” pledges in the Conservative Party manifesto are “completely unfunded”.
The Tories have set out plans for billions in tax cuts, which the Tories claim would be paid for by £12 billion of savings on welfare.
But Labour say the money has already been spent after the BBC reported Mr Hunt last week wrote in a newsletter to prospective constituents in Surrey that the tax cuts would be funded by savings from an “enormous back to work programme (which I announced in the Autumn Statement last year)”.
The Conservatives said the back to work programme announced in 2023 is not the basis for their £12 billion savings figure, as they accused Labour of being in “complete denial” about increases to the working-age welfare bill.
Speaking during a visit to Southampton, Labour leader Sir Keir told reporters: “What has emerged this morning is truly extraordinary because what you’ve got is no less than the Chancellor admitting that the money that they were pretending was available in their manifesto for their desperate policies is in fact money that’s already been accounted for.
“So that means you’ve got a manifesto from the Tories which isn’t worth the paper on which it is written because it is completely unfunded.
“It is extraordinary – the fact that it has come from the Chancellor I think makes it even more extraordinary.”
He added: “The money isn’t there, that’s the major problem.”
Shadow Treasury minister Darren Jones said: “This private admission from Jeremy Hunt that the Conservatives’ welfare cuts are not new, the money has been spent, and their plans are therefore unfunded drives a coach and horses through his party’s manifesto.”
At a hastily-arranged press conference in London, shadow paymaster general Jonathan Ashworth put a copy of the Tory manifesto into a shredder, claiming that is what Mr Hunt had done to the Conservatives’ economic credibility.
He said: “This newsletter, which Mr Hunt released to his constituents in recent days, totally shreds the Tory manifesto and totally shreds any remaining credibility on tax and spend the Tories once had.”
A Conservative Party spokesman said: “Unless action is taken, the working-age welfare bill will rise by more than £20 billion a year by the end of the decade.
“Labour is in complete denial about this and don’t think it’s possible to save a single penny from this unsustainable rise.
“We don’t think that’s right, which is why have set out how we would save £12 billion from the welfare bill by the end of the next parliament, including by controlling spending on health and disability benefits and taking people’s benefits away after 12 months if they don’t accept a job.
“Keir Starmer’s refusal to even think about tackling this problem would mean one thing: higher taxes.”