Labour manifesto: fact checked

Brexit

In his launch speech, Jeremy Corbyn said Boris Johnson’s claim that he will get Brexit done was “a fraud on the British people”.

It’s not fraudulent of Boris Johnson to say his deal gets Brexit done. If approved by parliament, his withdrawal agreement—which is what he refers to as his “oven-ready” deal—would mean that the UK stops being a member of the EU.

But Jeremy Corbyn is right to point out that the Brexit process will continue for many years. Mr Johnson’s withdrawal agreement wouldn’t secure a trade deal with the EU. The UK would enter a “transition period” during which we would still follow EU rules and pay money to the EU. This is set to run until the end of 2020 but could be extended by either one year or two. At the end of the transition period, the UK could either start trading with the EU under the terms of a newly-negotiated trade deal, or start trading with the EU on WTO or “no deal” terms.

Mr Corbyn also cited EU chief Brexit negotiator Michel Barnier as saying a UK-EU Brexit deal would take three years to negotiate.

Michel Barnier’s quote needs to be understood in context. Last month, he said of a future trade deal: “we will have to renegotiate for one year, two years, three years, maybe more in some areas, to rebuild all that will have been pulled apart by the desire of those backing Brexit.”

So he was not totally definitive, and the phrase “in some areas” is important. It might be possible for the UK and EU to conclude the trade deal before some smaller aspects are finalised. For example, the EU’s trade deal with Canada came mostly into force in 2017, but some aspects were not implemented then.

Nonetheless, experts say extending the transition period beyond 2020 “may prove unavoidable”. It’s also worth noting that none of the EU’s other recent free trade agreements have been negotiated and provisionally implemented in under three years. One difference in this case is that Boris Johnson’s government and the EU have already agreed some broad principles for what a future deal should look like.

The EU’s track record brings us on to the question of how long a UK trade deal with the USA would take. Jeremy Corbyn says it would take “even longer” than three years, and he has previously pointed to the EU-Canada trade deal as an example.

That deal took five years to negotiate, and another two before it was provisionally applied. That doesn’t mean a UK-US trade deal necessarily would take as long. We’ve not seen any robust predictions for how long a UK-US deal would take, and we don’t yet know exactly what would be on the table during discussions.

Some major EU trade deals (for example with South Korea and Ukraine) have taken longer than seven years to provisionally implement, while others have been quicker than that.

NHS

At the manifesto launch Jeremy Corbyn said: “Mr Johnson is preparing to sell out our National Health Service for a United States trade deal that will drive up the cost of medicines and lead to the runaway privatisation of our health service.

“500 million a week of NHS money, enough for 20,000 new nurses, could be handed to big drugs companies as part of a deal now being plotted in secret.”

Boris Johnson addressed similar claims in Tuesday’s ITV debate, saying:

“It is completely untrue. There are no circumstances whatever in which this Government or any Conservative government will put the NHS on the table in any trade negotiation. Our NHS will never be for sale.”

If you are willing to accept Boris Johnson’s promise, you could stop reading now.

We can’t know for sure what any government will do. We can examine some of Labour’s claims and what we know about the trade negotiations and how they might affect the NHS.

The claim that NHS drug costs will increase by £500 million a week is extreme and unrealistic. It has not been the case in countries which have agreed trade deals with the USA, such as Australia. It also depends on a UK government being willing to accept a deal which would increase the costs of the NHS by £27 billion a year.

As we’ve said before a trade deal is unlikely to fundamentally redesign the way the NHS is funded and American companies can already bid for private contracts to provide clinical services in England (health services in Scotland and Wales are devolved and are not run on the basis of contracts.)

In both cases there are genuine concerns.

Published US negotiating objectives for a UK-US trade deal make clear that the US aims to improve the access that US pharmaceutical companies have in the UK. It is possible that this will have some impact on drug prices.

Meanwhile, one concern about a trade deal is that the “investor protection” mechanisms could stop a future UK government from reducing the levels of private provision within the NHS without paying compensation to US investors. The British Medical Association has called for the NHS to be carved-out from the investor protection mechanisms of any future UK trade agreement.

We’re writing about all of this in greater depth and will publish that piece shortly.

Environment

The manifesto contained a number of claims about the environment. It said that “just 100 companies globally are responsible for the majority of carbon emissions.”

This claim needs some context. It comes from a 2017 report from a charity which works with companies to publish their environmental impact data. Excluding some things like agricultural methane, between 1988 and 2015, 71% of the estimated greenhouse gas emissions from human activity originated from 100 fossil fuel producing companies.

This includes the emissions released when this fuel was used by their customers.

The manifesto also said: “Our polluted air contributes to over 40,000 premature deaths a year.”

The claim that there are 40,000 premature deaths a year comes from a 2016 report from the Royal College of Physicians and the Royal College of Paediatrics and Child Health. The report looks at the number of attributable deaths from the amount of particulate matter (very small solid and liquid material between the size of a virus and the thickness of a human hair) in the air and the number of deaths attributable to nitrogen dioxide (a toxic gas which comes from petrol or diesel car engines or natural gas in a domestic central heating boiler or power station) in the air.

However, these numbers should be viewed with some amount of caution. It is not the case that these are all individuals who have pollution on their death certificate as their cause of death. Air pollution generally makes existing illnesses worse rather than directly killing people. This number is based on an estimate which is derived from large scale studies with large margins of error.

The manifesto also claimed that “energy use in buildings accounts for 56% of the UK’s total emissions, making it the single most polluting sector.”

This doesn’t seem quite right. Transport is the single biggest sector for emissions in the UK at 27%.

We’ve seen Labour make a similar claim before, that “electricity and heat use in buildings, when taken together represent 56% of the UK total” of emissions. This seems to come from government breakdowns on which sectors released the most greenhouse gas emissions in 2017.

It looks like Labour added together the emissions that come from the energy supply sector (24%), business (17%) and residential (15%) sectors, to get 56% of total emissions.

But it’s unclear how this relates to ‘buildings’ as Labour claims and we’re going to look into this further.

Tax

Jeremy Corbyn also said Labour’s manifesto was costed with:

“No increases in VAT or income tax or National Insurance for anyone earning less than £80,000.

“There is no increase for 95% of taxpayers.”

It’s correct that the Labour manifesto plans no increases in VAT, income tax or National Insurance for people earning less than £80,000.

It’s also correct that people earning less than £80,000 account for around 95% of taxpayers (somewhere between 95% and 96% according to 2016/17 figures from HMRC).

But that doesn’t mean Labour plans no tax rises whatsoever for these people, because there’s more to tax than just VAT, income tax and National Insurance.

For example Labour’s manifesto commits to scrapping marriage allowance, a policy introduced in 2015 which gives a tax break to couples with a combined income of under £62,500.

In 2018/19, 1.78 million people claimed marriage allowance at a cost of £485 million.

Apart from that there are various other taxes that could affect people with salaries of under £80,000.

Labour has pledged to reverse cuts to inheritance tax made by the Conservatives since 2017, which allowed people to pass on an amount of property tax-free, in addition to the existing £325,000 tax free allowance which applies to all assets.

Scrapping the property allowance will obviously affect higher earners more than lower earners, but that’s not to say that people earning less than £80,000 will be unaffected by the proposal.

Labour has also proposed extending the sugar tax to milk-based drinks, which will affect everyone who buys those products, regardless of salary.

Aside from taxes that affect individuals directly, there’s also taxes on businesses to consider.

Labour also plans to put corporation tax back up to 26%, following reductions over the past nine years.

We typically think of corporation tax being associated with large companies, but corporation tax is paid by all limited businesses.

Around one million UK businesses in 2017/18 had a corporation tax bill of up to £10,000, meaning in most cases their profits would have been no higher than £53,000.

Reversing reductions to corporation tax would affect the owners of these businesses some of whom will earn below £80,000 per year.

Brexit

NHS

Environment

Tax

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