November 21, 2019
UK Prime Minister had failed to land a decisive blow on opponent Jeremy Corbyn in the first television debate on Nov 19, 2019. PHOTO: EPA-EFE/JONATHAN HORDLE / ITV
LONDON (BLOOMBERG) – UK Prime Minister Boris Johnson blew the lid off his Conservative Party’s biggest election tax-cut pledge so far, in a chaotic and disjointed announcement in which he repeatedly got the details wrong.
It is the kind of unscripted gaffe that could knock his campaign off course. Mr Johnson’s Tories are enjoying double-digit leads in most opinion polls over the Labour Party, but he had a difficult night on Tuesday (Nov 19), failing to land a decisive blow on opponent Jeremy Corbyn in the first television debate.
On Wednesday, he needed to regain the momentum. Instead, Mr Johnson seemed to be freewheeling as he made a major policy announcement.
The prime minister said he would cut taxes for working people by raising the earnings threshold at which they are required to start paying National Insurance (NI) contributions – a levy that funds state benefits and pensions.
Mr Johnson was in northeast England speaking to engineering workers when one member of the crowd asked him if he would cut taxes for people like her. He said the earnings threshold above which workers start to pay NI contributions would rise to £12,000 (S$21,124) if his party wins the Dec 12 election.
“We’re going to be cutting National Insurance up to 12,000, we’re going to be making sure that we cut business rates for small businesses,” Mr Johnson said after he was asked if his proposed tax cuts would just be for the rich.
“We are cutting tax for working people.”
Several hours of silence from Tory headquarters followed before a senior party official clarified that Mr Johnson’s ultimate aim was to raise the NI contributions threshold to £12,500 – not £12,000 as the premier had said.
The official also said there is no date set for reaching the target, but that when it eventually comes, the tax cut will be worth about £500 per person.
As a first step, the Tories would cut NI contributions from early 2020 by lifting the payment threshold to £9,500 from £8,632, the official said.
Yet Mr Johnson later appeared to confuse the figures again.
“In the budget we will go up to the 9,500 threshold, and that will put £500 in the pocket of everybody,” he told the BBC.
In fact, the initial cut will be worth far less. The Tories themselves later issued a press statement saying the first phase would save people about £100 per year, from next year. The Institute for Fiscal Studies said it would be closer to £85.
It should be a crowd-pleasing policy to woo working people who want to save more of the money they earn from the tax office. But the announcement – when it came – was so shambolic it risks losing its impact.
It also provided immediate fodder for opposition parties.
“Well he makes it up as he goes along, doesn’t he?” Mr Philip Lee, a former Conservative MP who switched to the Liberal Democrats, said at his new party’s manifesto launch on Wednesday.
More dangerously, the Tories will need to find another consumer-friendly policy to sell to voters when they do eventually publish their own manifesto. Without sufficient news, the document could well be overshadowed by criticism in the media debate that follows.