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Johnson sets out plans to lift 2 million workers out of National Insurance

The PM said now is the right moment to put more money in people’s pockets.

Boris Johnson has said the Tories will raise national insurance thresholds (Stefan Rousseau/PA)
Boris Johnson has said the Tories will raise national insurance thresholds (Stefan Rousseau/PA)

By Gavin Cordon and Harriet Line, PA Political Staff

More than 2 million low-paid workers are set to be lifted out of National Insurance under plans to be unveiled in the Tories’ General Election manifesto.

Boris Johnson said the manifesto would include a commitment to raise the threshold at which workers start paying National Insurance contributions (NICs) from £8,628 a year to £9,500 – eventually rising to £12,500.

The Prime Minister had initially appeared to blurt out the plan ahead of the manifesto launch – expected at the weekend – during a campaign visit to an engineering company in Teesside.

However, he later confirmed it to reporters following him on the campaign trail, saying it would put “around £500” in people’s pockets.

“We think this is the moment to help people with the cost of living and to do more to help people on low incomes with the cost of living, to put more money into their pockets,” he said.

The disclosure came as Tories came under fire for re-branding one of their official Twitter accounts as a fact-check service during Tuesday’s TV debate between Mr Johnson and Jeremy Corbyn.

The Liberal Democrats, meanwhile, launched their election manifesto with a promise of a £50 billion “Remain bonus” for public services if they succeed in their aim of stopping Brexit.

Mr Johnson said that if the Conservatives were returned to power on December 12, they would move to raise the threshold to £9,500 in the first budget of the new parliament at a cost to the Exchequer of £2.1 billion.

However he declined to be drawn on when they intended to achieve the “ambition” of lifting it to £12,500, with the Tories saying only that it would be done “over time”.

Paul Johnson, director of the Institute for Fiscal Studies (IFS), said that if the Prime Minister wanted people to gain the full benefit of £450-a-year they would have to move to the higher threshold of £12,500 at a cost of £10 billion.

“That’s a big tax cut,” he told the BBC.

“The initial change would save £70-80 a year. You’d need to go the whole way to save £450 or so.”

Xiaowei Xu, a research economist at the IFS, said raising NIC thresholds was an “extremely blunt instrument” for helping the low paid.

“Less than 10% of the total gains from raising NICs thresholds accrue to the poorest fifth of working households,” he said.

“The Government could target low-earning families much more effectively by raising in-work benefits, which would deliver far higher benefits to the lowest-paid for a fraction of the cost.”

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John McDonnell said raising NICs thresholds would deliver limit benefits to the low paid (Steve Parsons/PA)

Shadow chancellor John McDonnell said that while the cost to the public purse would be significant, those on low incomes would see little benefit.

“Even after 10 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 £11 billion so everyone who relies on public services and social security will be wondering whether they will be paying the price.”

Mr Johnson also pledged to ensure that no-one has to sell their home to pay for the cost of their care in later life, saying the Tories would “continue to put very substantial sums” into social care every year.

And on tax relief for those on middle and high incomes, the PM said the Government’s “priority” was for those who “need to cope with the cost of living”.

He told reporters: “Everybody is comprised within the NICs increase threshold that we’re talking about but the priority must be for those who need to cope with the cost of living.”

Mr Johnson further revealed that his hero is cricketer Ian Botham, admitting: “It’s tragic, I still watch YouTube videos of that 1981 series.”

Elsewhere, Lib Dem leader Jo Swinson insisted the party’s “ambitious” manifesto plans to tackle the climate change “crisis”, invest in schools and extend free childcare showed they were more than a “one-trick pony” dedicated to stopping Brexit.

However, she told the PA news agency: “All of those things, absolutely, become much easier to do if we stop Brexit and have the benefits of remaining in the European Union.”

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Jo Swinson launches the Lib Dems’ manifesto in Camden (Yui Mok/PA)

Earlier the Tories came under fire after temporarily renaming their official press office Twitter account “factcheckUK” during Tuesday night’s televised election debate.

Twitter issued a sharp rebuke warning that “any further attempts to mislead people” would result in “decisive corrective action”.

The Electoral Commission – the official elections watchdog – also issued a warning saying voters were entitled to expect “transparency and integrity” from campaigners.

Senior Tory figures brushed off the controversy, saying it was part of their “instant rebuttal” mechanism to challenge “nonsense” claims made by Labour.

Foreign Secretary Dominic Raab said it had been perfectly clear throughout that it was a Conservative Party account and that no-one among voters “gives a toss” about the cut and thrust of social media.

However, former Conservative minister David Gauke – now standing as an independent – said it was “a blatant attempt to mislead people” by the Tories, in a way which would not have happened under Theresa May or David Cameron.

PA

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