Theresa May: Tory tax plans have not changed

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Media captionTheresa May: “Our position on income tax hasn’t changed”

Theresa May has insisted Tory tax plans have not changed after a senior cabinet minister signalled there would be no income tax increase for higher earners.

The prime minister said it was her party’s “firm intention to reduce taxes on ordinary working families”.

Sir Michael Fallon said in the Daily Telegraph that there would be no rise in income tax for higher earners.

But the 2017 manifesto scrapped a previous pledge not to raise VAT, national insurance or income tax.

Speaking in West Yorkshire the PM said: “Our position on tax hasn’t changed. We have set it out in the manifesto.

“What people will know when they go to vote on Thursday is that it is the Conservative party that always has been and is and always will be a low tax party and it is our firm intention to reduce taxes for ordinary working families

“But when people come to vote, they know they have a choice between a Conservative party that always has been, is and always will be a party that believes in lower taxes – and a Labour party whose manifesto we know will cost ordinary working people.”

However, in his Telegraph interview, Sir Michael appeared to go further than Mrs May.

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Sir Michael Fallon said high earners had nothing to worry about

He said voting Conservative was “the only way” people could be sure income tax would not be hiked.

Asked if high earners could confidently vote Conservative next week, safe in the knowledge that their income tax would not go up, Sir Michael said: “Yes.

“You’ve seen our record. We’re not in the business of punishing people for getting on, on the contrary we want people to keep more of their earnings.

“The only way they can be sure their taxes won’t rise is to vote Conservative. We already know your tax will go up if you vote Labour on Thursday.”

The Conservative manifesto had committed the party to keeping tax “as low as possible” but had not ruled out increases in income tax.

‘No shopping list’

Foreign Secretary Boris Johnson, later told BBC’s Newsnight, said: “We will bear down on taxation and we have absolutely no plans to raise income tax. Our plans are to cut taxes. Labour’s plans are to put them up.”

Former Conservative work and pensions secretary Iain Duncan Smith told BBC Breakfast the party was trying to get away from the “idea that you set out every single thing in detail saying we won’t do this, we won’t do that, we won’t do the other because then you get a large shopping list”.

At the 2015 general election, David Cameron promised that income tax, National Insurance, and VAT – the so-called “triple lock” – would not go up under a Conservative government.

That promise lead to a U-turn earlier this year when Mrs May’s government had to ditch plans to raise National Insurance contributions for the self-employed.

The Tories have pledged not to raise VAT but to increase the personal allowance to £12,500 and raise the minimum earnings for the 40p higher rate to £50,000 by 2020.

‘Raises suspicions’

BBC political correspondent Gary O’Donoghue said Theresa May had been keen not to box herself in too much when it came to promises on taxation, but the party may now feel it has to send some signals to ensure its supporters turn out in numbers.

Shadow chancellor John McDonnell said Sir Michael’s comments showed the Tories were the party for “the few, not the many”.

“The only guarantee the Tories are prepared to give at this election is to big business and high earners while low and middle income earners have seen no guarantee from Theresa May that their taxes won’t be raised,” he said.

Former Lib Dem business secretary Sir Vince Cable asked where the money was coming from to pay for Sir Michael’s apparent promise.

“Since they are ruling out increases in income, corporate tax and VAT we must assume that there will be an increase in national insurance and in various ‘stealth taxes’ yet to be specified. It undoubtedly raises suspicions,” he said.

What are the other parties pledging?

Labour has promised to raise the income tax rate to 45p for earnings above £80,000 and to 50p for each pound earned over £123,000.

It says it will not raise income tax for those earning less than £80,000.

It says the planned rises for higher earners will help fund billions of pounds of investment for schools and the NHS and an expansion of free childcare, in what it calls a “programme of hope”.

Meanwhile the Liberal Democrats have pledged to increase income tax by a penny to help pay for the NHS, social care and mental health.

The SNP says it would support the idea of raising the top rate of income tax for those earning more than £150,000 from 45p to 50p.

It says there would be no increase in taxation on the low paid, in national insurance or in VAT.

Whereas, the Green Party wants to implement a wealth tax on the top 1% of earners and introduce a “Robin Hood” tax on financial transactions.

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