This article is more than 10 months old

This article is more than 10 months old

Labour has dismissed a Tory dossier claiming Jeremy Corbyn’s policies would cost £1.2tn as “an absolute work of fiction”, as the two parties clashed again over their plans for the economy.

The Conservatives are keen to portray Corbyn’s party as reckless when it comes to public spending, and published a 36-page document setting out their claim that Labour’s proposals would carry a price-tag of £1.2tn.

Labour’s election coordinator, Andrew Gwynne, rejected the figure, which was splashed all over the Sunday newspapers. “Look, this is an absolute work of fiction by the Conservatives. You can’t trust a word that Johnson and his ministers say on this issue,” he told the BBC’s Andrew Marr Show.

“We will have a fully costed manifesto in due course when we launch that. And you know, the challenge is actually for the Conservatives to fully cost their own manifesto, something they didn’t do in 2017.”

The Tory analysis of Labour’s spending plans was published after the cabinet secretary prevented the chancellor from producing the Treasury’s costings last week.

Sajid Javid told the BBC on Sunday: “What we’ve set out today is the true cost of Corbyn’s Labour. It’s additional spending planned by Labour over the life of the next parliament, if they win the next election.”

“These are eye-watering levels of spending. £1.2tn. It will be absolutely reckless and will leave this country with an economic crisis within months. Not years, within months,” he said.

The chancellor conceded, however, that the calculations were partly based on Corbyn’s 2017 manifesto – or on the Tories’ own assessment of the cost of policies passed by Labour’s conference, not all of which are likely to be enacted.

It also tots up spending increases for successive years, when usual practice in assessing the impact of policy on the public finances is to give an annual cost.

The Conservatives may hope that like the £350m a week for the NHS that was widely questioned but still resonated with voters during the 2016 referendum campaign, the £1.2tn figure will cut through to voters regardless.

Both parties have promised significant increases in public investment, funded by government borrowing.

Play Video 1:55 Javid v McDonnell: Tory and Labour parties reveal economic plans – video

That marks a dramatic change in approach for the Conservatives since the departure of Javid’s predecessor, Philip Hammond, who was chancellor until July but has now stepped down from parliament.

Theresa May’s party dismissed Labour’s plans for increased borrowing two years ago and said the party was relying on a “magic money tree”.

Javid, however, said last week he would be prepared to contemplate borrowing up to 3% of GDP to invest in infrastructure and other projects.

The independent Institute for Fiscal Studies (IFS) has said the Conservatives’ investment plans would amount to an extra £20bn a year, and Labour’s to £55bn a year.

Neither of the main parties has yet set out its tax plans. Javid declined to say whether the Conservatives would implement promises made by Boris Johnson during his campaign to become leader, which included an increase in the threshold for higher-rate tax to £80,000 a year.

At one point, Marr challenged the chancellor, saying: “You seem uncannily more familiar with Labour’s manifesto than your own manifesto.”

The Brexit minister Kwasi Kwarteng also sought to defend the Conservatives’ calculations on Sunday, but refused to give an equivalent for his own party’s spending plans. “I’m not going to bandy around figures,” he told Sky News.

Javid is reportedly keen to hold a head-to-head debate with the shadow chancellor, John McDonnell, about their parties’ spending plans, which Labour sources said they were happy to see go ahead.

After the Conservatives’ disastrous campaign in 2017, Hammond complained that his party had not focused enough on the economy as an issue, contrasting a spendthrift Labour party with Tory fiscal rectitude.

This time the Conservatives are determined to press Corbyn hard on economic competence, but with Johnson keen to increase spending on hospitals, schools and frontline police, Javid has adopted a considerably more relaxed approach to balancing the books than his predecessor.

The Liberal Democrats’ central spending pledge is a radical increase in childcare, which they said would be free for all working parents from when their child turns nine months old, at a cost of almost £15bn a year. They said they would fund it by reversing corporation tax cuts and increasing capital gains tax.