Budget 3.1

These figures use different accounting categories. They include gross programme envelopes and estimates requiring further modelling. They do not constitute one final annual spending total.

At £12,570, a payment to roughly 50 million adults would imply a gross annual cost of £628.5 billion, rounded to approximately £629 billion in the original manifesto.

The figure of 50 million adults is a source modelling assumption, not a verified count of eligible recipients. The calculation illustrates the gross scale before taxes, replaced benefits and other offsets.

This is why Manifesto 1.1 does not propose an immediate increase to £12,570. The USI is intended to grow alongside tax reform, employment, productivity, economic growth, welfare reform, pension reform and healthcare reform.

The £629 billion illustration is a gross-cost calculation, not a final net fiscal cost.

• Progressive income tax at the proposed marginal rates of 33%, 40%, 45%, 47.5% and 49%.
• Progressive reduction of the Personal Allowance as the USI rises.
• Replacement of employee National Insurance by the unified income-tax system. Abolishing a tax does not itself raise revenue.
• Progressive replacement of overlapping working-age income-support mechanisms.
• Employment growth producing more income tax and consumption, increased VAT receipts and lower welfare expenditure where supported by the model.
• Economic growth expanding the underlying tax base.
• Employer National Insurance reform phased over ten years rather than introduced as an immediate reduction.

Unspecified public-service savings must not be treated as available funding. Future modelling must also examine UK-EU trade effects alongside other trade opportunities.

The Defence Levy would be ring-fenced for defence. The National Care Levy would be ring-fenced for the National Care Service.

These original yield estimates remain unverified. They depend on the definition of gross income, exemptions, behavioural effects and the treatment of pension, self-employed and investment income.

On the original illustrative assumption of UK GDP of roughly £3.1 trillion, defence spending at 5% would equal approximately £155 billion.

The original comparison assumed a starting point of approximately 2.5% of GDP. These are source modelling assumptions, not updated current statistics.

The Defence Levy would not fund the entire defence budget. It would provide a dedicated contribution, with the remainder financed through general taxation and the wider public finances.

The original housing model assumed one million social homes and an average public capital contribution of £200,000 per home. That produced an illustrative total of £200 billion over ten years, or approximately £20 billion a year before land receipts, borrowing, housing-association contributions and private participation.

The original annual envelope was £20-£25 billion. Those all-social assumptions have been retired as operative Manifesto 1.1 costings.

The revised mixed-tenure programme cannot honestly be costed by multiplying one million homes by one public subsidy. The replacement model must account for:

• the balance between different housing tenures;
• average council and housing-association loans;
• grants, borrowing costs and repayment duration;
• land contributions and supporting infrastructure;
• developer tax expenditure and incentives;
• clawback receipts; and
• homes delivered without a direct public-capital contribution.

No replacement headline housing cost has been invented. A new mixed-tenure cost model is required.

Ongoing operating expenditure would follow construction. These are original capital estimates, not annual running costs.

Their relationship with the £2-£3 billion annual courts-and-justice programme envelope requires further modelling.

Cannabis

• consumer excise revenue;
• wholesale and supplier taxation;
• licensing fees;
• corporation-tax and income-tax receipts from the legal industry; and
• reduced enforcement costs associated with the illicit market.

The net fiscal effect must be established through detailed modelling before implementation. A proportion of receipts would be ring-fenced for public-health, drug-treatment and enforcement programmes.

Food taxation

The food traffic-light system would generate additional receipts from qualifying Red and Amber products.

Those receipts would be used primarily to finance healthy-food subsidies at the point of sale and the programmes contained within the Healthy Food Fund.

The policy should therefore be viewed principally as a tax-and-subsidy rebalancing mechanism rather than a general revenue-raising measure.

No net cannabis yield or food-tax rate was fixed in the source. Food-tax receipts cannot be spent through the Healthy Food Fund and simultaneously counted as unrestricted funding for other manifesto commitments.

Administrative costs, substitution, manufacturer reformulation and the durability of receipts all require further modelling.

• Independent Treasury and HMRC-style modelling of taxation, eligibility and behavioural effects.
• Clear separation of gross costs, net costs, capital expenditure, annual spending, loans and guarantees.
• Updated verification of economic, demographic and fiscal assumptions.
• A replacement mixed-tenure housing cost model.
• Full interaction modelling between the USI, tax reform, benefits, pensions and healthcare.
• Published sensitivity analysis showing the effect of weaker growth, lower revenues or higher programme costs.
• Transparent revision where evidence does not support the original working assumptions.