The Tories should attack the national insurance increase
James Forsyth 6:00pm
After a tricky few weeks for the Tories, the PBR has come of a bit of a relief for them. It is generating far more bad headlines for the government than good ones. The Standard’s splash on the national insurance hike is a taste of what the coverage is going to be like for Labour tomorrow.
One point the Tories should be hammering home is that the national insurance hike is a far more significant tax rise than the tax on bank bonuses. The one-off tax on banks that pay sizable bonuses will only raise £550 million while in 2010-11 the various national insurance changes will cost taxpayers more than £3 billion and will hit 10 million people, all those who earn more than 20k a year.
The Tories are saying, as they did the last time that Labour announced a national insurance increase, that reversing this tax on jobs will be their first priority in government. But a bit of boldness on this front would be welcome. The Tories should just say they won’t do it if elected as they don’t want a jobless recovery.
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Nick
December 9th, 2009 6:19pm Report this commentI'm amazed, and pleasantly surprised, at the negative spin that even the BBC is putting on the PBR.
Short the UK
December 9th, 2009 6:21pm Report this commentI thought the 1% pay rise for the public sector was a nice wheeze, vote for us and get 1% as the Tories will give you 0%.
The Tories must now focus on growth and jobs, we must remain/become the Singapore of the West. The richer we are the fairer we are, don't let Old Labour tax our businesses to oblivion.
Joe Mooney
December 9th, 2009 7:04pm Report this commentReference the scrappage point I think that we should have a scrappage scheme for old PMs. It is time to replace old worn out Brown with David Cameron.
emil
December 9th, 2009 7:19pm Report this commentThe problem ; not enough jobs.
Labour solution
1) A further tax on employment
2) Tax the wealth generators, taking more money out of the economy.
Darling / Brown F = FAIL
TGF UKIP
December 9th, 2009 8:45pm Report this commentTrouble is, James, that .5% or even 1% rise doesn't sound too consequential to Joe Public.
Perhaps, the Tories should just keep their powder dry until the IFS has worked through the figures and comes up with what the .8% increase in public spending for 2011 will really mean.
As Fraser posts above, after deducting debt interest and welfare payments the departmental cuts are going to be eye-watering and far in excess of the previous 7%. Unless they pin these to Brown now, if by some miracle they actually win a majority, those post 11 cuts will be "Tory cuts" - exactly as Brown plans.
Beer Moth
December 10th, 2009 7:52pm Report this commentemil.
The problem is that there are not enough jobs?
Well, the concensus at the Spec' seems to be that the massive influx of immigrants has created millions of jobs. They carry them in with them in parcels.
The answer to all our problems then would appear to encourage more immigrants to come here. Do you have any spare rooms in your house?
Ralph Musgrave
April 2nd, 2010 8:44am Report this commentIt is blindingly obvious that an NI contribution increase considered in ISOLATION would destroy jobs (as will any tax increase). But government spends the proceeds, and that creates jobs. Plus there is no obvious reason why the number of jobs created should be much different to the number destroyed.
It could be claimed that the NI increase raises the cost of employing those on minimum wages, which might price them out of work. But even that argument is flawed. While the NI increase would raise the cost of employing minimum wage people by 1%, that is balanced by the fact that the NI increase would also increase prices by 1% (other things being equal).
I.e. it would cost more pounds and pence to employ minimum wage people, but the employer gets more pounds and pence for those people’s output. Put another way, as long as the output of minimum wage people remains constant in real terms, there is no reason they should not be priced out of work.
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