Boris Johnson has announced the Conservatives will raise the threshold for paying national insurance to £12,500 within five years.The prime minister, during a campaign visit to an engineering company in Teesside, told workers he would be “cutting tax” if the Tories win the 12 December general election.
Mr Johnson was challenged by one worker as to whether he was promising “low tax” for “people like you, or people like us”.
The PM replied: “I mean low tax for… working people.”If you looking at we’re doing… we’re going to be cutting national insurance up to £12,000.
“We’re going to be making sure we’re that we cut business rates for small businesses.
“We are cutting tax for working people.”
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Tory sources confirmed Mr Johnson plans to raise the threshold for paying national insurance to £9,500 next year with an “ultimate ambition” to raise it to £12,500.They claimed raising the threshold to this level would eventually give workers an extra £500 per year.
:: Listen to the Daily podcast on Apple Podcasts, Google Podcasts, Spotify, SpreakerCurrently, the majority of workers make Class 1 national insurance contributions if they earn more than £8,632 per year (£166 per week).Mr Johnson previously floated the idea of raising the threshold for national insurance contributions during his successful bid to be elected Conservative leader earlier this year.
Last month, the Institute for Fiscal Studies (IFS) calculated it would cost about £3bn for every £1,000 by which it is raised.They said: “Raising the point at which employees and the self-employed start to pay National Insurance contributions (NICs), from its planned level of £8,788 per year in 2020-21, would cost about £3bn for every £1,000 by which it is raised.”If the employer NICs threshold were raised alongside this, the total cost would be £5bn.”Raising NICs thresholds would benefit everyone who currently pays NICs – all workers above the bottom 12% of the weekly earnings distribution, or any employee aged 25+ working at least 20 hours per week at the national living wage.”The IFS also said during last summer’s Tory leadership race that another candidate’s suggestion to raise the National Insurance threshold to £12,500 would mean 2.4 million would not have to pay it.
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The Conservatives have yet to reveal their general election manifesto, with Mr Johnson’s declaration of action on the national insurance threshold seemingly unplanned.Tory sources said they were “working” to provide more details.Labour shadow chancellor John McDonnell said: “Even after ten years of cruel cuts and despite creaking public services the Tories still think the answer to the challenges of our time is a tax cut of £1.64 a week, with those on universal credit getting about 60p.”Meanwhile independent experts have said this will cost up to £11bn so everyone who relies on public services and social security will be wondering whether they will be paying the price.”The Tories are stuck in the 1980s while a Labour government will tackle head-on the climate and human emergencies of our time.”The Brexit Election on Sky News – the fastest results and in-depth analysis on mobile, TV and radioWatch Dermot Murnaghan live from 9pm on 12 DecemberSee the exit poll at 10pmWatch KayBurley@Breakfast election special on 13 DecemberFind out what happens next in All Out Politics special from 9am with Adam Boulton
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