Hunt: Santa would be left with debt and fewer toys if he followed Labour’s plans

Santa would have fewer toys to give out next year and debt interest to pay if he adopted Labour’s borrowing plans, according to Jeremy Hunt.

The Chancellor took aim at the Opposition by trying to explain the impact of the party’s £28 billion-a-year green investment pledge in Christmas terms.

Labour originally promised in 2021 to invest £28 billion a year until 2030 in green projects if it won the next election.

In June, shadow chancellor Rachel Reeves said the figure would instead be a target to work towards in the second half of a first parliament.

Speaking in the Commons, Conservative MP Louie French (Old Bexley and Sidcup) welcomed the recent tax policies announced by Mr Hunt before adding: “(I) hope to see more announced soon – especially a rise in the higher rate threshold.

“But, as the Conservatives look to reduce the tax burden on working people, does the Chancellor share my concerns that a £28 billion-a-year unfunded spending commitment will likely see taxes rise and lead to higher interest rates if Labour were ever in government?”

Mr Hunt replied: “It’s not just me… Paul Johnson, of the Institute for Fiscal Studies (IFS), when talking about Labour’s plans, said additional borrowing drives up interest rates – which is of course a backdoor tax rise on families with mortgages.

“But as it’s Christmas, perhaps I could explain it this way: if Santa borrowed £28 billion, he might have more toys to give out this year but he’d also have debt interest to pay and fewer toys to give out next year.”

The IFS said last month that Mr Hunt’s “substantial tax cuts” for workers and businesses in the autumn statement are set to be “paid for by planned real cuts in public service spending”.

Mr Hunt used the fiscal event to lower the 12% national insurance rate on earnings between £12,570 and £50,270 to 10%, saving someone earning £35,000 more than £450 a year.