Robert Peston Robert Peston

Why Johnson’s tax gamble will pay off

(Photo by Simon Dawson/No. 10 Downing Street)

Boris Johnson’s announcement today, promising he will fix the £15 billion hole in health and social care, may well be the decision that determines his and his party’s fate at the next election — and, by implication, Keir Starmer’s reaction will also determine his destiny. 

Probably the most important point is that after the 18 months we’ve had, most people would argue that putting the NHS and care for the elderly and vulnerable on a stable financial footing should be the Prime Minister’s number one priority. 

Johnson’s critics would say he shouldn’t break two important manifesto pledges to pay for it

Johnson’s critics would say he shouldn’t break two important manifesto pledges to pay for it: first, not to raise national insurance and, second, not to ignore the earnings index to set the state pension. And they would also say that increasing national insurance by 1.25 per cent to garner an extra £10 billion per year is an unfair tax choice, with its burden falling disproportionately on younger and poorer people and employers. 

So, putting to one side the more important question of whether the policy is good or bad for the UK — and I will assess that when I have the fine print — will it be good or bad for Boris Johnson and the Tory party? I suspect, despite the bellyaching of his cabinet ministers and backbenchers, it will turn out to be good for him. Because: 

  1. Of all the reasons for paying more tax, doing so to fix health and social care is one policy that British people will probably feel OK about. 
  2. Raising the money through National Insurance rather than income tax means it automatically applies throughout the whole UK, including Scotland — and for Tory unionists, this is a virtue, in that it will almost certainly lead to a punch up with the SNP.
  3. Literally

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