Cathy Newman checks it out
When Labour’s 180-page dossier on the Conservatives’ “credibility gap” on tax and spend was handed out at a press conference this morning, the assembled hacks challenged the FactCheck team to come up with a line-by-line analysis by lunchtime.

Well, we didn’t quite make it by then, or even in time for afternoon tea – and I can’t promise we’ve scrutinised every last paragraph – but here’s some choice nuggets that you’re welcome to chew over for dinner.

The Conservatives have a long-standing commitment to recognise marriage in the tax system. It would cost £4.9bn-a-year. (p43)
Labour has put a hefty price tag on Tory plans to offer a tax break for married couples and civil partnerships. Almost £5bn according to today’s dossier.

The implication being that cuts will have to be made elsewhere, or taxes raised, to pay for it. But where did Labour get this huge total from?

The reason Labour’s precise cost of £4.9bn for Cameron’s marriage tax break raised some eyebrows today was because no-one seems to know what the plans are anyway.

Indeed, the Conservatives admit that, just weeks before the election, they have yet to release precise details about marriage tax.

The Tory leader told Channel 4 News in July 2007 that he hadn’t said precisely how he’d do it; and that hasn’t changed. So, in such a vacuum, Labour has seemingly turned to a think-tank with Tory links for clues.

The Centre for Social Justice (CSJ), chaired by former Conservative leader Iain Duncan Smith, and recently described by George Osborne as the most influential think-tank in Britain, published a Green Paper in January outlining a transferable tax allowance for married couples with very young children.

It costed the policy at £600m-a-year as a watered down starting point, before eventually rising to £3.2bn-a-year to take in more people, not just those with young children.

But Labour quotes figures released by the Treasury in October last year which costed this transferable tax policy at £4.9bn based on the CSJ policy idea. The CSJ told FactCheck the £4.9bn costing was idiotic.

The Conservatives confirmed to FactCheck today that there are still no precise plans for how the tax break for married couples and civil partnerships will work.

Yet despite a pledge in today’s dossier to be as generous as possible to the Conservatives by estimating their costs at a minimum, Labour has ignored the CSJ’s £3.2bn figure, and gone for the Treasury’s £4.9bn forecast instead. So a near £5bn cost, for a policy they do not even know the Tories are planning to adopt.

Freeze council tax for two years. (p38)
The Tories have promised to fund English councils freezing council tax over a two-year period. Today in its dossier, Labour costs their policy at £700m in the first year, £1.4bn in the second year and £1.4bn in all subsequent years.

The Conservatives said this was wrong, but the figure Labour uses is backed up by the Institute for Fiscal Studies. They found that, if the Tories decided to freeze council tax without making cuts anywhere else to pay for it, they would face a £1.4bn bill.

But this is where it gets complicated. If the Tories fund the policy by making cuts to central government spending in England, they would only have to cut around £1bn rather than the £1.4bn net cost of the policy.

This is to do with the Barnett formula, which controls how much money is given to Wales and Scotland. If the government gives more money to English councils to fund the council tax freeze, it would also have to give more money to the devolved governments. So if it finds cuts to offset the extra council tax money, the total cost would end up being less.

So this doesn’t mean Labour is wrong to use the £1.4bn figure in its dossier. But can the Tories find the necessary cuts to offset it?

Reducing government spending on consultants and advertising. (p90)
In order to freeze council tax, the Tories plan to fund the policy by cutting government advertising, marketing and consultancy spend. Labour’s dossier credits the Tories with £1bn of savings in 2011/12, the first year the council tax freeze kicks in. That’s more than they’d actually need.

But Labour then points out that the government (since the 2009 pre-budget report) plans to take its own £650m annual scythe to advertising and consultancy budgets.

This means the books now already factor in a big cut – reducing the effect of the Tories’ plans. So in the second year of the freeze, 2012/13, when the Conservatives would need a £1bn cuts – because of the existing £650m savings – they’re only left with efficiencies of £350m to play with.

Of course, this might all seem a bit theoretical – the Conservatives promised earlier this week to find £6bn of – as yet unspecified – “efficiency savings”. As FactCheck found, it had yet to be seen whether these would stack up.

But at the moment, the government’s own planned reductions in the cost of advertising and consultancy spend make it look very tricky for the Conservatives to find the extra savings they’d once planned from these budgets, without cutting them almost completely.

Non-domicile levy (p67)
The Tories plan to bring in a flat fee of £25,000 on non-doms – wealthy individuals who live in Britain but have links to another country, and therefore don’t have to pay UK tax on their foreign income.

They say this would fund one of their flagship policies, a cut in inheritance tax, costing £1.5bn annually. But Labour claims – based on Treasury figures given out in parliament – that it would only raise around £100m a year. The dossier quotes extensively from a FactCheck on the issue last month.

We reassessed the battle of the numbers in the light of data on the government’s new(ish) non-dom levy of its own. This is a flat rate levy like the Tories’ plans, but set at £30,000 and payable only by those who have lived here for seven out of the past nine years.

Figures released under the freedom of information act showed that 4,200 non-doms had paid the Treasury’s new levy, compared with a prediction of 4,000.

The IFS thought that, because this first number seemed to concur with the Treasury’s predictions rather than the Conservatives’ more optimistic calculations, it might well be the case that the rest of the Treasury’s numbers would stack up.

But even this was – they also said – filled with uncertainty. Surprisingly little is known about how many non-doms there are in the country, and how they might behave if a new tax was brought in.

The Labour dossier does point out, in the notes, that the tax take from the non-dom charge is far from proven. So we can’t be sure that it would be the smaller Treasury estimate that Labour cites in the document. But then, we certainly can’t prove that it would be the bigger sum the Tories hope, either.

Cathy Newman’s verdict
A lot of work has gone into Labour’s dossier – and a myriad of facts and figures.

The Tories predictably dismissed the document as a work of fiction, but many of the claims analysed by FactCheck have some merit.

We conclude Labour’s on firm ground to raise questions about how the Conservatives will fund their £1bn council tax freeze but shakier in its £4.9bn costing of Tory tax breaks for married couples.