The strain of remaining on message for a whole hour in his head-to-head debate with Jeremy Corbyn seems to have been too much for Boris Johnson. It really wasn’t part of the plan for the prime minister to reveal ahead of time a rabbit due to be pulled out of the hat at the Conservative party manifesto launch – an increase to £12,000 in the threshold at which national insurance contributions have to paid.
Although premature, the announcement dovetails with other Tory proposals – higher public spending, an increase in the national minimum wage to £10.50 and the decision not to go ahead with cuts in corporation tax. All are intended to win support among voters in the marginals in the Midlands and the north of England and to defuse the argument that Johnson is only interested in delivering for the rich. At the 2017 general election, the Tories had no offer to counter Corbyn’s anti-austerity programme; this time they do.
The prime minister’s pledge was a bit vague. Did it apply just to employee NICs or to the NICs paid by employers as well? How long would it take to raise the threshold from £8,632 to £12,000? And why £12,000, when it would make more sense to align the NICs threshold with the income tax personal allowance at £12,500?
The answer to the last question was simple. Johnson meant to say £12,500 but got the figure wrong. Number crunchers at the Institute for Fiscal Studies have estimated that a NICs threshold at that level would cost £11bn a year if it applied to employees and the self-employed, and £17bn a year if employers were included as well.
Quite legitimately, people are going to ask how this promise is going to be met because it is hard to square with the new, watered-down rules for the public finances that the chancellor, Sajid Javid, has come up with. These are that the government can borrow up to 3% of national output for public investment and that day-to-day spending will be matched by tax revenues by the middle of the next parliament.
Javid inherited a bit of scope to cut taxes or increase spending from Philip Hammond but the increases in public spending announced in September and changes to the way the public finances are calculated mean that leeway has already been used up. And that’s before slower growth this year is factored into the equation.
Hence it wasn’t that long before Tory spin doctors were obliged to come clean about one of the other questions: it would take time to hit the £12,500 threshold. To avoid breaking the fiscal rules or being forced to raise other taxes, the limit will be raised initially to £9,500, with a £2bn price tag. Voters should remember to read the small print.
Why China needs an Extinction Rebellion
China is a totalitarian one-party state. Protests, as events this year in Hong Kong have shown, are discouraged. But if ever there was a country that needed its own version of Extinction Rebellion it is the world’s second biggest economy.
Why? Because China’s appetite for coal-fired power stations is both staggering and scary. It is staggering because demand for the fossil fuel massively outweighs attempts elsewhere in the world to cut back on the use of coal.
Thirty countries have agreed to phase out coal-fired power stations and between them in the 18 months to June they reduced capacity by 8GW. Yet over the same period China increased its capacity by 42.9GW.
That’s scary because climate scientists say time is running out to tackle global heating. There will be no point in the rest of the world agreeing to the urgent and unprecedented changes demanded by the UN Intergovernmental Panel on Climate Change if a country as big and as resistant to external pressure as China’s growth model means it is pushing in the opposite direction.
Globalisation has allowed western countries to outsource not just manufacturing jobs but their carbon emissions to China. At some cost.
