Boris Johnson’s tax pledges won’t ‘unleash potential’ – but they will lead to more public spending cuts

The Tories are already open to the charge of going round in circles. Now their unnecessarily cautious and risk-averse programme could fuel the problems it proposes to solve

Tax is a big issue at every general election and this one is no exception. Boris Johnson had intended to make a splash at the launch of the Conservatives’ manifesto by announcing a plan to take the lowest paid out of tax by raising the salary at which national insurance starts to bite to the same level as income tax. But he managed to steal his own thunder by blurting out his headline-grabbing announcement on the campaign trail last week.

After some scrabbling around before Sunday’s manifesto launch, the Tories cooked up a less dramatic pledge: a “triple tax lock” under which they would not raise the rates of income tax, national insurance and VAT in the next five-year parliament.

During the Tory leadership election, Mr Johnson promised to increase the threshold for the 40p rate from £50,000 to £80,000 at a cost of £9bn. But it does not appear in the Tory manifesto. The prime minister insisted he had lost none of his “tax-cutting zeal” but argued it was “right to focus our tax cuts on those who need them most”.

Although that was the right choice, the proposed cuts in national insurance are less generous than the £500 per worker he initially suggested. That was based on raising the threshold from the current £8,628 to £12,500 at a cost about £10bn. The manifesto describes that as “our ultimate ambition” but guarantees only a more modest cut of less than £100 per worker (from a £9,500 threshold next April). This reform would proportionately help higher earners more. According to the IPPR think tank, it would hand £10 a week to the highest-earning households and less than £1 a week to the lowest, and would make negligible impact on poverty.

The Tories will be hoping that voters contrast their tax pledges with Labour’s plans to increase income tax for the top 5 per cent of earners – those on more than £80,000 a year.

Labour’s approach, and the 1p rise in income tax rates proposed by the Liberal Democrats, are more realistic and honest; the parties recognise that improved public services have to be paid for.

The Tory manifesto includes extra spending on schools, the police and health, including a last-minute promise to provide 50,000 more nurses, helped by restoring the bursaries the party had cut.

These focus-group-tested policies are designed to appeal to traditional Labour voters in the north and midlands, who will probably decide this election. Even if they like Mr Johnson’s line on Brexit, many are unsure about the Tories’ commitment to public services.

The Tories want political gain from higher spending without imposing any pain. Tying their own hands on tax might look like a clever wheeze in the heat of an election, but it is not a responsible one. David Cameron made a “no tax rise” pledge in 2015 and found himself hemmed in. Theresa May announced it would end in 2020 but now it is back.

Uncertainty over the global economy, slower growth after Brexit and a possible rise in interest rates, could make some tax increases the right response. But Tory ministers would be loath to break their manifesto pledge on tax, and so might resort to public spending cuts or less transparent stealth taxes. The Tories are already open to the charge of going round in circles: Mr Johnson’s manifesto promises an extra 20,000 police officers, precisely the number cut since 2010.

Their NHS cash injection would be more credible if the manifesto addressed a social care crisis the prime minister vowed to “fix once and for all with a clear plan” in his first day in the job. A £1bn a year sticking plaster, a vague pledge that people will not have to sell their homes to pay their care bills and a call for a cross-party consensus do not amount to a “clear plan”.

Mr Johnson’s programme is unnecessarily cautious and risk-averse. Despite trumpeting their spending promises, the manifesto is that of a party who would rather keep the spotlight on Brexit. Yet a document entitled “Get Brexit Done, Unleash Britain’s Potential” is based on a false premise. It gives the impression that if the UK left the EU in January, the public would never hear the B-word again.

In reality, it would only mark the start of negotiations on a UK-EU trade deal that could easily take three years. The rival parties offering a Final Say referendum, however, would resolve Brexit one way or the other within six months.