The UK lost £16.7bn in tax revenues over nine years of slow growth under the Conservatives, figures unearthed by Labour show, as the party seeks to underline the economic effects of the Tories in office. Labour, under the new shadow chancellor, Rachel Reeves, hopes to build a narrative about “a decade of Tory misspending” which would undermine Boris Johnson’s levelling-up rhetoric. In figures released to the Guardian on Wednesday, Labour said the country had lost £16.7bn in tax revenues compared with the amount that would have been in the Treasury’s coffers had the UK grown in line with the OECD average. Using figures from the House of Commons library, Labour said the revenue could have paid for more than four times the government’s annual level of investment in skills in the same time period. It also amounts to about half of total government capital spending on transport outside London last year, or the cost of employing 500,000 nurses or almost 300,000 teachers. The money could also have covered the costs of running 15,000 primary schools or building 3,000. The shadow chief secretary to the Treasury, Bridget Phillipson, said: “A decade of Tory misspending of public finances and waste has weakened the foundations of our economy and severely hampered Britain’s growth.
“They cut our public services to the bone and said that would grow our economy, but our NHS, our schools and our police forces were left exposed when we entered the pandemic.” Phillipson said she anticipated that a post-pandemic spending spree would drive new economic growth in the short term, but the government had no sustainable plan for long-term growth. “Labour will do things different, putting building a resilient economy first – growing our public services and making sure our businesses and industry have what they need to thrive,” she said. The figure was calculated by Labour because of a gap of £46bn between UK GDP in 2019 and what UK GDP would have been in 2019, if the UK had grown at the same rate as the OECD between 2010 and 2019. Applying the tax take proportion of 33.4%, it suggests that £15.4bn in tax revenue had been missed by 2019 because the UK grew at a slower rate to the OECD, or £16.74bn taking inflation into account. A Labour source said it was important the party emphasised that the economic situation the country faced was the result of Conservative governments’ choices. “Before we went into the pandemic, nearly a decade of Conservative government had structurally weakened schools, hospitals and people’s opportunities to get the jobs they wanted and the skills they needed,” the source said. “The fact that these were Conservative governments, that they were Conservative choices that led us here, many of which were voted for and backed by Johnson and Sunak, must be brought home. They are responsible for their record. “This is part of starting to set out the choice for voters: a Tory party that mishandles the economy, wastes taxpayers’ money, and makes the wrong choices, or a Labour party that focuses on wealth creation and tackling inequalities.” Labour used its opposition day debate on Wednesday to accuse the government of failing to meet its promises on levelling-up, including underinvestment in catch-up education for pupils’ schooling hit by the pandemic. The education recovery commissioner for England, Sir Kevan Collins, resigned last week over the £1.4bn catch-up scheme which he said fell far short of what was needed. He was reported to have put forward ambitious plans costing up to £15bn, including longer school days.