Posted on: 27th November 2019
Finally, we turn to our Government’s manifesto. Having been in power for the last nine years, the Conservative’s are pitching to resolve the issues that have blighted their more-recent history and to secure a majority in parliament – something they have been unable to attain in the three previous general elections.
Notably, the Conservatives are the only party to propose not changing the current tax rates pledging a ‘triple tax lock’ to ensure that Income Tax, National Insurance and VAT do not rise over the next five years, whilst promising to raise the National Insurance threshold to £9,500 next year and to £12,500 over the course of the next government.
Carl Emmerson, Deputy Director at the Institute for Fiscal Studies, said: “The commitment not to increase the rates of income tax, VAT or National Insurance contributions is not good policymaking. Should a structural hole appear in the public finances, it might be deemed necessary to increase taxes. While there are plenty of other ways in which additional revenue could be raised, previous Conservative Chancellors have on occasion deemed increases in rates of NICs or VAT to be a reasonable way to raise large sums. This commitment would also make it harder to deal with the concern that the tax system – particularly National Insurance – under-taxes self-employment relative to employment, as Phillip Hammond found when he tried to address this issue.”
Alongside the other major parties, the Tories are promising to guarantee the ‘Triple Lock’ on the State Pension.
However, the Tory manifesto didn’t go into too much detail on anything elserelated. In terms of the NHS pension issue faced by doctors who are at risk of unpredictable tax charges due to the tapered annual allowance, the Government have promised an urgent review within the first 30 days of their government.
Steve Webb, director of policy, Royal London, welcomed the party’s decision to address the pension issues but said it did not go far enough in providing a solution for higher earners.
The Conservative has also promised a review on those potentially missing out on tax relief using the net pay method for those earning between £10-£12,500 a year.
It means some workers earning £12,499 a year could retire with a pot worth £59,000, while others will end up with £51,000. According to a recent Freedom of Information request by Royal London, around 1.7 million workers are affected.
Given that two reviews have been promised, Jon Greer at Quilter has criticised the manifesto for its lack of detail.
He said: “The taper problem was introduced by the Conservative government. The ill-conceived policy has had a disastrous impact on the NHS and has the capacity to bring several public services to a grinding halt. Despite this, Boris Johnson’s Tory party appear to refuse to accept that the taper is not fit for purpose and should be scrapped, instead choosing to look for short term bespoke fixes for the NHS.”
Given the first pages of the Conservative manifesto are primarily aimed at Brexit and discrediting Labour’s plans for a second referendum and that the Tories had a Queen’s Speech not so long ago promising aBill etc makes for a light read. Maybe the lack of detail or solution leads to a status quo in terms of personal tax, allowances and .
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