Rivals turn on Johnson over tax cut for top earners

Boris Johnson’s plan to cut taxes for top earners has been condemned by leadership rivals and a think tank.

The former foreign secretary is drawing up plans to raise the 40p income tax threshold to £80,000 at a cost of almost £10 billion.

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.

But Mr Johnson’s leadership rivals tore into his priorities as the battle for Number 10 intensified.

Tory leadership race
Michael Gove said he would not make it a priority to give the ‘already wealthy another tax cut’ (Stefan Rousseau/PA)

Michael Gove said: “One thing I will never do as prime minister is to use our tax and benefits system to give the already wealthy another tax cut.”

Dominic Raab said he would rather cut taxes for the lowest paid rather than what would be interpreted as “the caricature that you’re the party of privilege and you are only in it to help the wealthy”.

Matt Hancock said he would reduce tax on working people “when we can afford it”.

Andrea Leadsom said it would be “impossible” for Mr Johnson to get his plans through the current Parliament.

The Resolution Foundation think tank, which focuses on living standards, said the plan was “the most regressive” tax policy being proposed by the Tory leadership contenders.

The think tank’s analysis found someone earning £80,000 would see their tax bill fall by £3,000 a year under the plan.

The think tank’s chief executive Torsten Bell said: “Only one in seven people will earn enough to get any benefit from this policy – and the biggest winners are those on the very highest incomes.

“In fact, 83% of the gains go to the top 10% of households.

“Someone on, say, an MP’s salary of £79,468, gains £2,946. One Nation it is not.”

He added:  “Further widening the gap between the rich and poor is an odd lesson to draw from the UK’s experience of financial crisis and Brexit.”

A Whitehall source said: “At a time when the Conservative Party is losing younger voters, Boris’s measure feels tone deaf.

“His tax proposals inherently benefit wealthy individuals – like himself  and fellow MPs – while offering nothing to those on lower incomes.

“Is this a space the Conservative Party wants to be in?”

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(PA Graphics)

The former foreign secretary signalled his plans in his regular Daily Telegraph column, writing: “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.”

The move would cost an estimated £9.6 billion a year and be funded from the £26.6 billion of “fiscal headroom” currently set aside by the Treasury for no-deal preparations.

It would also be partly offset by increased National Insurance contributions.

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