Five things Johnson’s tax cut for the rich could be better spent on

Johnson's tax cut for the rich costs more than scrapping tuition fees.

Boris Johnson’s campaign to be Tory leader has been marked by silence as he avoids media appearances and only announces policy via his Telegraph columns.

However, one policy he has announced is a tax cut for the wealthy. At the moment, people have to pay 40% tax on everything they earn between £50,000 and £150,000.

Johnson wants to change this so that people only pay 20% tax on everything they earn between £50,000 and £80,000. They will still pay 40% on earnings between £80,000 and £150,000.

These changes will cost £10bn a year and only help the 3m people who earn more than £50,000, according to the Guardian. Those who earn £80,000 or above will benefit the most.

Here’s five things £10bn could be better spent on.

  1. Funding Hammond’s school “cash for little extras” 25 times over

The government’s spending on eductation per pupil in England fell by 8% between 2009/2010 and 2017/2018 as a result of Conservatives and Liberal Democrat austerity spending cuts.

This has led to a £5.4bn shortfall over the last three years. Schools and teachers have dealt with this through cuts, asking parents for money and funding pupils’ food and school uniforms out of their own pockets.

So many teachers were insulted when chancellor Phillip Hammond offered schools just £400m a year. According to the I, this means an average secondary school would get £50k and a primary school would get £10k.

With £10bn a year, you could give schools some real money. You could give each secondary school £1.25m and each primary school £250,000.

2. Scrapping tuition fees

Tuition fees were introduced by Labour in 1998 and then tripled to £9,000 a year by the Tory-Lib Dem coalition in 2010.

In their 2017 manifestos, the Labour and Green Parties promised to scrap tuition fees.

The Institute of Fiscal Studies said this would cost £8bn a year – £2bn less than Johnson’s tax cut.

3. Plugging local councils funding gap

Through their austerity policies, Tory-led governments have cut funding to local councils.

At the same time, demands on councils budgets have increased – as the ageing of the population means more people need care, for example.

The Institute for Fiscal Studies estimates that there will be an £8bn gap in English councils’ funding by 2025.

Instead of Johnson’s £10bn tax cut, he could plug this gap – and almost certainly have money to spare for Scottish and Welsh councils in a similar position.

4. Funding Labour’s social care plans

In its 2017 manifesto, Labour said that the Conservatives had cut £4.6bn from social care budgets and that Labour would increase them by £8bn over the next parliament.

This would fund a National Care Service paying carers a real living wage, including for travel time and allowing them to spend more than 15 minutes on a visit.

It would also fund the raising of the asset threshold below which people are entitled to free state support and a cap on the personal contributions individuals make towards their care costs.

4. Putting counsellors in all schools, setting up a children’s health fund, a cultural capital fund and an arts pupil premium and have £9bn+ left over

Labour’s 2017 manifesto promised to:

  • Extend schools-based counselling to all schools at a cost of £90m a year.
  • Set up a Childrens Health Fund to invest £250m in childrens’ healthcare.
  • Set up a Cultural Capital Fund to “upgrade our existing cultural and creative infrastructure to be ready for the digital age and invest in creative clusters across the country, based on a similar model to enterprise zones”. This would be administered by the Arts Council and would cost £200m a year.
  • Introduce an arts pupil premium to every primary school in England. To invest in cultural and creative activities at a cost of £160m a year.

All this would cost £610m a year. So £9.39bn less than Johnson’s £10bn tax cut.

Joe Lo is a freelance journalist and a reporter for Left Foot Forward.

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6 Responses to “Five things Johnson’s tax cut for the rich could be better spent on”

  1. nshgp

    80 bn a year is the cost of May’s deal

    So that leaves 70 bn a year

    1.4 bn is the schools funding shortfall.

    We can take min wage earners out of tax completely.

    These investments of yours. 250m.
    Are you going to tell the kids they are going to be forced to pay back 250m plus interest?

    Cultural Capital Fund. More quangos, with the money being pocketed by those on the quango.

    Far easier, get rid of the Arts council and use the money on min wage earners.

    And no doubt you want to pay the EU billions, subsidies to EU nationals here, ….

  2. Tom Sacold

    Use it to implement the Dilnot Report in full.
    Raise basic tax threshold to £15k.
    Remove all University fees for students studying STEM subjects and give them full grants to cover living costs.
    Etc., etc., etc. …

  3. Elizabeth Chell

    I’d opt to put support into Local Govt with some stipulations that require them to mend the roads, plant trees, and build, more affordable, (to lower income earners), houses.

  4. Stewart Eames

    Schools and the (public) NHS…

  5. Patrick Newman

    Tom, Dilnot was very unambitious but would be a step forward on where we are now – with no sign of a green paper! The next Labour government would need more than £10 billion to stop further decline in service and benefits and more like £20bn. More if the public sector is to be restored to pre-austerity levels. There is no way that a Tory government will find this money even if they did not implement Johnson tax cuts. We not only cannot implement tax cuts but Labour must find ways of collecting much more tax from those who can afford it.

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