Labour ‘confusing facts and fiction’ over mortgage surge claims say Tories

Speaking after the launch of the Tory manifesto, which unveiled a £17.2 billion package of tax cuts including a further 2p reduction in employees’ National Insurance, Ms Reeves put forward what appears to be her party’s counterpart to the £2,000 claim.

She said the Conservative manifesto contained tens of billions of unfunded commitments and could result in “a second Tory mortgage bombshell” as the parties continue to clash over tax and spend.

Earlier, Ms Reeves said analysis by her party suggested the Tory spending plans required an extra £17.4 billion of borrowing in 2029-30, and a total of £71 billion over the whole five-year period.

That could result in the Bank of England putting up interest rates by 0.56 percentage points, resulting in someone with an 85 per cent mortgage on the average house in England facing £4,800 in extra mortgage payments over the five years.

‘A second Tory mortgage bombshell’

The shadow chancellor added that the £12 billion of welfare savings had either already been accounted for by the Office for Budget Responsibility or could not be delivered.

Comparing the impact of Mr Sunak’s plans to those of his predecessor Liz Truss, Ms Reeves said: “The consequence of an increase in day-to-day borrowing to fund the commitments made in this manifesto would amount to a second Tory mortgage bombshell, because higher borrowing at this scale would force the Bank of England to increase interest rates.

“The result would be an increase in the average mortgage totalling £4,800 over the course of the parliament.”

Later, she added: “When it comes to plans in this Tory manifesto, the money is simply not there. And it will mean £4,800 more on your mortgage. To pretend otherwise is dishonest and it’s irresponsible.

“The money is not there. That’s why this will result in higher borrowing and therefore higher mortgage bonds, worth £4,800.”