Tax cut promises ‘at odds’ with Tory manifesto, think tank says
Boris Johnson’s claims that he would deliver a tax-cutting Budget in the first 100 days of a new government “are at odds with his party’s manifesto”, a think tank has said.
The Prime Minister last night laid out his priorities for government, saying chancellor Sajid Javid would hold a Budget that cut taxes for families in the months after the 12 December General Election.
Read more: General Election: Boris Johnson sets out plan for first 100 days
The Tory party plans to raise the national insurance payment threshold to £9,500, providing workers with a modest tax cut worth around £90 a year.
Yet the Conservatives’ own manifesto costings document says there would be a net increase in tax revenue due to the scrapping of planned tax cuts laid out in the 2016 Finance Act.
The Resolution Foundation think tank today said the manifesto therefore “clearly shows net tax rises”.
Adam Corlett, senior economic analyst at the Resolution Foundation, said: “Yes, the manifesto includes a national insurance cut worth up to £85 a year, at an overall cost of £2bn.
“But this is dwarfed by the welcome £6bn revenue increase from cancelling planned corporation tax cuts.”
Paul Johnson, director of the Institute for Fiscal Studies, said: “Beyond a small reduction in NICs there are no tax cuts promised in the Conservative manifesto. The biggest announcement was in fact that a legislated cut to corporation tax would not happen.”
He said the chancellor’s new commitment to balance the current budget means “it hard to see how there is fiscal space for any other significant tax cuts”. The IFS has previously said that the Tories would probably end up increasing both spending and taxes.
When asked about these criticisms on the campaign trail, Boris Johnson today said: “We are cutting taxes on national insurance contributions and business rates – I am certainly not aware of the data you describe.”
Read more: General Election: Tory and Labour spending plans not credible, says IFS
Matt Kilcoyne, deputy director of the Adam Smith Institute think tank, said it would not be accurate to characterise the scrapping of a planned tax cut as raising taxes. Yet he said the Tory manifesto showed a “lack of ambition” when it came to cutting taxes.
The Resolution Foundation’s Corlett said the parties were not being upfront about their tax plans. “Britain seems to be heading for tax increases whoever wins the election, and politicians from all parties should be up front about why that change is needed,” he said.