General Election 2019: Tories target tax cuts at the lower paid

The dust has now settled on last night’s ITV leaders’ debates, to the relief of the participants and the collective yawning of the viewers. The general consensus is that last night’s affair was low-scoring draw, with neither the Prime Minister nor Jeremy Corbyn really landing any fatal blows. A snap poll conducted  by YouGov found that 51% of viewers believed that Boris Johnson won the debate, while 49% believe that Jeremy Corbyn did.

As the BBC’s Political Editor Laura Kuenssberg surmised, “neither man seems to have made a meaningful mistake. Nor did either of them appear to have a breakthrough moment.” In other words, it is not a game changer. David Waywell has more analysis of the contest last night in his political sketch of the debate – you can read it here.

Still, Boris Johnson, supposedly the great campaigner, failed knock out Corbyn.

Turning from the dry dust of debate to the twists and turns of the campaign trail, there was a lot going on. Earlier this afternoon, in the middle of a visit to an engineering plant in Teesside, Boris Johnson apparently blurted out a very significant policy in the upcoming Conservative manifesto. He announced that the Conservative party would be cutting National Insurance for those earning less than £12,000.

Johnson was confronted by a voter from nearby Doncaster, Claire Cartlidge, 35, who works as head of fuel for Stobart Energy. Cartlidge questioned the Prime Minster on his tax policy: “You said low tax, do you mean low tax or people like you or low tax for people like us?’ He responded by saying that he was committed to “low tax for…working people”, adding that “we’re going to be cutting national insurance up to £12,000, we’re going to be making sure that we can cut business rates for small businesses. We are cutting tax for working people.”

Johnson has form on this pledge: he had already suggested the idea when he was running for the Tory leadership in the summer. It will not be a cheap policy from the point of view of the Treasury’s balance sheet – the Institute for Fiscal Studies has estimated that lifting employees and the self-employed from the planned level of £8,788 per year for 2020-21 would cost about £3bn for every £1,000 for which it is raised.

However, Johnson and his team have clearly decided that this policy will make a tangible difference to the voters that they are now targeting. Tax cuts such as these will put more money in the pockets of those who need it in the lower and middle income boundaries. It will also be Thatcherite in its essence, cutting taxes and allowing people to keep more of their own income rather than trying to redistribute wealth through higher taxes to fuel government spending.

This may not meet the new standards of fiscal rigour being championed by the Liberal Democrats, however. The manifesto which the Lib Dem leader, Jo Swinson, unveiled today, announced that her party would advocate increasing income tax by an extra penny in order to raise a total of £35bn for the NHS over the lifetime of the next parliament. At the same time, Swinson’s party has pledged to raise a new tax on frequent flyers, which would be levied on people who take more than one or two international return flights per year.

The Liberal Democrats are seeking to raise taxes to pay for particular election goodies of their own, however. Their manifesto announces that the Liberal Democrats would pursue a freeze of train fares, costing £1.6 billion over five years and a 20% rise in the minimum wage for people working on zero-hours contracts. Jonathan Cribb of the IFS told the BBC that he believes this is likely “to reduce the number of firms who want to hire people on zero-hours contracts”, but adds that it might also “incentivise” these firms to “move people on to a regular contract”. Overall, “there could be fewer opportunities for these contracts”, even if zero-hours contracts become better paid positions.

It seems to be the case that the Liberal Democrats are trying to hit a kind of David Cameron and Nick Clegg shaped sweet spot on several issues, pledging humane solutions to problems such as knife crime in inner city London and measures to tackle climate change, while also emphasising fiscal rigour and budgetary discipline.

The top line, of course, is stopping Brexit by a revocation of Article 50. Swinson is trying to win over a combination of Remain-inclined former Conservative voters, London liberals, and businesses keen on the EU, alongside the soft, centre-left Lib Dem core support. You can see more analysis of the Liberal Democrat budget and its contents, which includes plans to legalise Cannabis, in a good summary provided by the BBC.

There are signs that the Liberal Democrat strategy is working. In terms of the national polls, the Liberal Democrats have suffered from a slight decline in their vote – but their vote has surged tremendously in particular areas of London. On the weekend, the Observer published three Deltapoll surveys from London seats which were closely fought between Labour and the Conservatives in 2017 – in Kensington, Finchley and Golders Green, and Wimbledon.

In all three of the constituencies, where the Conservatives hold a narrow lead, the Liberal Democrats have taken over Labour to become the main challengers. The evidence suggests that the great swings to the Liberal Democrats in these locations, in which they boast increases to their vote of more than 20%, are coming at the expense of both the main parties. They are poaching pro-Remain voters from the Tories as well as eating into Labour’s vote.

The Liberal Democrats will probably still be the third or fourth largest party in the House of Commons after the election. However, the contest could see them emerge as a much more coherent and coordinated political force, and regain some ground lost in 2015 and 2017.