Boris Johnson promises to prioritise a £500 tax cut for the low-paid and end years of austerity if he becomes Prime Minister
- Mr Johnson has been stung by criticism of a £9billion plan to raise the threshold
- The leadership frontrunner said he could turn on spending taps after austerity
- But he has not pledged to help the low-paid ahead of the better off
Boris Johnson yesterday pledged to ‘prioritise’ a £500 tax cut for the low-paid ahead of help for the better off.
The Tory leadership frontrunner said he could turn on the spending taps after years of austerity, saying he was ‘prepared to borrow to finance certain great objectives’.
But he indicated controversial plans to raise the starting threshold for paying 40 per cent tax would be put on the back burner.
Mr Johnson has been stung by criticism of a £9billion plan to raise the threshold from £50,000 to £80,000, which critics say will not help families on low incomes.
Boris Johnson has pledged to ‘prioritise’ a £500 tax cut for the low-paid after years of austerity
Campaign sources yesterday insisted the plan would go ahead, saying it was needed to reverse the trend of middle class professionals such as senior teachers and police officers being dragged into a tax rate designed for the rich.
But Mr Johnson said he would now prioritise raising the threshold for paying National Insurance, which would benefit almost all full-time workers.
He told Sky News: ‘I think we should be looking at lifting people on low incomes out of tax, lifting the thresholds for national insurance. And I would remind you that that’s where my priority is.
‘When I was mayor of London we led the way, for instance, with the London living wage, and I think lifting NI contribution thresholds would be another good thing to do.’ Mr Johnson did not specify how far the NI starting threshold might rise from its current level of £8,632.
But campaign sources said he was attracted to the idea, first raised by former Brexit secretary Dominic Raab, of raising the rate in line with the starting threshold for income tax – which currently stands at £12,500.
Campaign sources say Johnson was attracted to the idea, first raised by former Brexit secretary Dominic Raab, of raising the rate in line with the starting threshold for income tax
The move would cost £11billion and deliver a tax cut worth £464 a year to most workers. About 2.4million low-paid workers would be taken out of the National Insurance system altogether.
The independent Institute for Fiscal Studies, which questioned Mr Johnson’s plans for the better off, said raising the NI threshold was ‘probably the best thing one can do through the tax system to help low earners, though even this policy offers most benefit to higher earners’.
Mr Johnson, who has also pledged billions more for schools and the police, said there was ‘cash now available’ to increase spending, using the £27billion fiscal ‘headroom’ set aside by Philip Hammond to deal with the potential fallout from a No Deal Brexit.
Yesterday, he announced plans to put ‘rocket boosters’ under the provision for children for special educational needs.
But former Treasury chief secretary Greg Hands warned against a ‘Corbyn-lite’ approach of borrowing in order to increase public spending.
Former Treasury chief secretary Greg Hands warned against a ‘Corbyn-lite’ approach of borrowing in order to increase public spending
Mr Hands, who is backing Jeremy Hunt, described a spending spree as a ‘very bad idea’, adding: ‘It has taken us nine years of hard work by everyone in the UK to restore sound money… and now is not the time to be Corbyn-Lite.’
Mr Johnson’s team was buoyed yesterday by new polling suggesting he is a long way ahead of his rival among Tory voters.
The Opinium poll for the Observer found that Mr Johnson was preferred over Jeremy Hunt by a large margin – 52:30 – among Conservative voters.