If it quacks like a high-tax duck and talks like a high-tax duck, it is difficult to believe that it is fact anything but a high-tax duck. So it is with Boris Johnson and Rishi Sunak, who professed this weekend to be “tax-cutting Conservatives” in a column confirming they were dead set on hiking national insurance taxation whilst in the middle of the highest inflation in more than a decade and a coming cost-of-living crisis.
Tax-cutting Conservatives cut taxes; tax-increasing ones increase taxes. It is abundantly clear in which camp both now sit.
In truth, whilst national insurance is set to go up in April, it is one of only a number of Government-led pocket raids awaiting the great British public. Late on Friday afternoon, the Treasury confirmed that the threshold at which graduates start paying back their student debt would be frozen, rather than moved upwards in line with inflation or average earnings.
The wonks at the IFS described it as a “tax rise by stealth,” but to be frank it’s not particularly well-hidden. Even before the freeze, graduates earning above the threshold were facing an effective marginal tax rate of 50 per cent.
Nobody is disputing that the public finances are in a horrendous state, but it is an odd world in which a Conservative government has decided that the way to fix it is to squeeze the pips of aspirational young workers. For one thing, it’s those that are the very people the government is relying on to spend, spend, spend their way to a consumer-led economic recovery. But it also sends a horrible signal in a global marketplace for talent.
It’s worth remembering, of course, that even pre-pandemic Boris was a tax-hiker. Corporation tax was supposed to be 17 per cent by now. Instead, he cancelled the cut, and hiked it to 25 per cent. That, of course, is passed on to employees.
Boris Johnson is fighting for his job. Some could be forgiven for looking at their payslips and hoping it doesn’t go as he’d hoped.