Johnson: I’ll hand low-paid workers £500 in tax cuts

BORIS Johnson yesterday pledged to ‘prioritise’ a £500 tax cut for the lowpaid 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.

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. 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.

Health Secretary Matt Hancock last night said Mr Johnson’s decision to relax spending rules could also result in a ‘fair’ pay rise for millions of public sector workers, following a decade of wage freezes and restraint.

Mr Hancock, a member of Mr Johnson’s team, told The Times: ‘Now that there’s money available, we need to show the public sector some love – they do a brilliant job for the country ... Higher pay, not higher taxes, means a pay rise for everyone, including in the public sector.’

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.