Why Johnson's tax gamble will pay off

7 September 2021

8:35 PM

7 September 2021

8:35 PM

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: 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 no one expects Johnson to keep his promises (in just recent months he’s broken them on the overseas aid budget and having vaccine passports); his brand is not as a man of his word
  4. If Labour votes against the National Insurance rise, Johnson will taunt Starmer all the way to the next election with having voted against supporting health and social care.
  5. The Tory base (and more Labour supporters than will be prepared to admit it) will approve of a policy that protects at least £100,000 of their savings from social care costs.

Johnson’s estranged adviser, Dominic Cummings thinks this will be the moment of Johnson’s downfall, that breaking his word by raising taxes will sink him as it sunk George Bush Snr in the 1990s. On this, I fear Cummings — who is intent on bringing about what he calls regime change — is succumbing to wishful thinking.

At worst for Johnson, voters will think ‘same old Boris, never could trust him’; at best they’ll say ‘fixing health and social care are what we want’.

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