Boris Johnson 'wants Scots to pay for tax cut for high earners', claims SNP
A proposed tax cut by Conservative leadership front-runner Boris Johnson would leave workers in Scotland paying for his "massive giveaway" for high-earners, the SNP claimed today.
Johnson, the favourite to replace Theresa May as Tory leader, pledged that if he became prime minister he would raise the threshold for the 40p tax band from £50,000 to £80,000 for workers in England, Wales and Northern Ireland.
He claimed the tax break would be paid for in part by increased employee National Insurance contributions and would boost the UK economy as it prepares to leave the European Union.
Labour shadow chancellor John McDonnell said the proposal showed “how out of touch the Tories are”.
Nationalists said that as income tax is devolved but National Insurance is reserved, it would leave taxpayers in Scotland funding a handout for well-off taxpayers in the rest of the UK.
SNP MSP Angela Constance said: “Boris Johnson’s priorities are all wrong – and this latest wheeze is an appalling insight into the future of the country if he gets his way.
“This proposal has more to do with appealing to Tory MPs than to meeting the very real challenges facing the UK. Yet, bizarrely, Boris Johnson remains frontrunner to be the next Prime Minister.
“Scottish taxpayers now face the prospect of paying for a tax cut for the likes of Boris Johnson and his cronies.
“That would be entirely indefensible – and is only likely to see a further rise in support for independence, which would give Scotland full powers over tax.”
The higher rate of income tax currently applies on earnings over £50,000 in England and the move could benefit more than three million people.
The former foreign secretary believes the cost of the policy could be met through some of the cash set aside for no-deal Brexit planning.
In his regular Daily Telegraph column, he said: "We should be cutting corporation tax and other business taxes. "We should be raising thresholds of income tax - so that we help the huge numbers that have been captured in the higher rate by fiscal drag.
"We can go for much greater economic growth - and still be the cleanest, greenest society on earth."
Under the plans someone earning £60,000 is estimated to see their tax bill fall by £1,000, the newspaper reported.
The move will cost an estimated £9.6 billion a year and will be funded from the £26.6 billion of "fiscal headroom" currently set aside by the Treasury for no-deal preparations.
It will also be partly offset by increased National Insurance contributions.
Paul Johnson of the Institute For Fiscal Studies think-tank told the BBC that higher rate taxpayers would receive a “quite significant tax cut” under Mr Johnson’s plans.
He added the biggest beneficiaries would include wealthy pensioners, and people living solely off investments, as neither pay National Insurance.
Former Commons Leader and leadership contender Andrea Leadsom told the BBC that “in reality, in this Parliament, it would be impossible to actually get wholesale tax changes through”.
Mr McDonnell said the Tory leadership contest was becoming a “race to the bottom in tax cuts”.
He added: “With our schools, care for the elderly and our police services at breaking point, Boris Johnson’s proposals to give a tax cut to high earners reveals how out of touch the Tories are.”
A spokesman for Boris Johnson said: “It’s up to the SNP whether they follow Boris’s leadership or continue with their policy of holding Scotland back as the highest-tax part of the UK. We urge them to follow Boris’s lead.
“Of course, the SNP’s statement today shows that the best thing that Scottish taxpayers can do if they want lower taxes is vote for the Scottish Conservatives and Unionists at every election.”