BORIS’S XMAS GIVEAWAY
He promises cut in National Insurance to give EVERYONE extra £460 a year
FAMILIES across the UK will benefit from a near£500 tax cut under radical plans unveiled by the Prime Minister yesterday.
In a dramatic move, Boris Johnson used a visit to an engineering works in Teesside to make an impromptu announcement that the Conservatives will raise the threshold for paying National Insurance to £12,500.
The move will give a tax cut worth £464 a year to millions of workers across the UK, including those in Scotland.
Mr Johnson said the Tories would make the first instalment next year if they are reelected, raising the threshold from £8,683 to £9,500, delivering immediate ‘money in the pocket’ worth about £100.
He said the first step would cost an ‘affordable’ £2.1billion, although the final cost is likely to top £10billion.
His decision to disclose the flagship tax pledge before his manifesto launch on Sunday appeared to be unplanned and caught aides by surprise. It came after industrial chemist Claire Cartlidge asked him: ‘Are these tax cuts for people like you or people like us?’
The Prime Minister appeared to be stung by the question, and replied: ‘I mean low tax for working people… we are going to be cutting National Insurance up to £12,000.’
Aides confirmed that the Tory manifesto would contain a pledge to raise the threshold to £12,500.
It will be a major boost for Scottish families, as National
Insurance is controlled by Westminster. In contrast, income tax is devolved to Holyrood and is controlled by the SNP Government.
As a result of recent budgets, everyone earning more than £27,000 pays more in Scotland than the rest of the UK.
Scottish Tory constitution spokesman Adam Tomkins said: ‘This is a welcome move for hard-pressed taxpayers. The SNP must rule out any attempt to grab back this welcome Tory tax cut.’
The tax gap grew in April after the higher rate threshold was frozen at £43,430 in the SNP’s budget – at the same time as it rose to £50,000 in the rest of the UK.
It means that someone earning £50,000 in Scotland will pay £1,544 more than they would if they lived in England.
The Institute for Fiscal Studies said Mr Johnson’s National Insurance policy would cost £11billion to implement in full, although it is likely to be phased in over at least five years. Some 2.5million lowpaid workers could be taken out of paying National Insurance completely.
The independent think-tank described the proposal as ‘probably the best thing one can do through the tax system to help low earners’, although the better-off will also benefit.
Mr Johnson hinted that plans to raise the threshold for paying the 40p rate of income tax from £50,000 to £80,000 in the rest of the UK are likely to be shelved, at least for now.
He said: ‘The thinking behind it is that we are tax-cutting Conservatives, but we think this is the moment to help people with the cost of living, and to do more to help people on low incomes with the cost of living, to put more money into their pockets, and we have to do that in a way that is prudent, that is affordable.
‘This will put around £500 in people’s pockets. It’s good for the economy, it stimulates consumption, it stimulates growth but it also will help people with the cost of living.’
Mr Johnson’s tax plans come after a decade in which successive Conservative governments raised the personal allowance for income tax to £12,500. Although the move has taken millions out of the tax system, many low-paid workers still pay National Insurance on their earnings at a rate of 12 per cent.
Ministers hope the relative restraint will contrast favourably with Labour’s spendthrift plans, which threaten to saddle the UK with hundreds of billions of pounds of debt.
SNP Westminster leader Ian Blackford said: ‘This is yet
‘Tax-cutting Conservatives’
another Tory con-trick which sees them giving with one hand and taking with the other. We know that the Tory government will always prioritise the rich over the poor.
‘Instead of attempting to distract people from a damaging decade of austerity... and their failure to support low income workers, they should instead be focused on fixing the broken Universal Credit system.’
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