Boris Johnson stands by VAT and income tax freeze promise despite £120bn coronavirus hit to public finances

Boris Johnson says his manifesto “guarantee” that income tax, VAT and National Insurance rates will not rise still stands - despite the coronavirus crisis requiring more than £120bn worth of emergency state spending measures.

Speaking during a visit to a construction site in Goole this afternoon, the Prime Minister told The Yorkshire Post that he remains committed to what was one of the central promises of his December election manifesto, despite the unprecedented amount of public spending that has been necessary since then as a result of Covid-19.

A pledge that his Government would not raise the rate of income tax, VAT or National Insurance was one of six key guarantees personally signed off by Mr Johnson on the opening page of the Conservative manifesto in December which helped him win a Parliamentary majority.

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But since then more than £120bn has been spent on state interventions such as the furlough scheme and bounce-back loans for businesses according to the latest figures from the Office of Budget Responsibility, with a further £1.5bn pledged today to support the arts sector and try and save museums, arts galleries and theatres from closure.

Boris Johnson speaking at the Siemens Rail Manufacturing construction site in Goole today. Pic: Downing Street

A further £16.5bn has been lost to the public coffers as a result of tax reductions.

Mr Johnson said yesterday he still hopes to avoid raising income tax, VAT or National Insurance contributions despite the situation.

“I don’t normally talk about fiscal stuff because I leave that to Rishi [Sunak] the Chancellor but what is in the manifesto is in the manifesto,” he said.

“We were elected, we got a big majority from the British people to deliver on that manifesto and we are very, very sincere in wanting to do that. All other fiscal questions you’ll have to direct to the Chancellor.”

Boris Johnson speaking to workers at the site.

When pressed by The Yorkshire Post to confirm whether that meant the guarantee still stands, Mr Johnson replied, “Yes, it stands.”

His comments come ahead of the Chancellor giving a speech on Wednesday which Mr Sunak has labelled a summer economic update in which he will set out “the next stage of our plan to secure the recovery”.

Mr Johnson made his remarks as he visited the construction of a new facility in Goole where Siemens will open a new £200m rail manufacturing facility in 2023 and create around 700 jobs.

The Prime Minister said the factory showed the country can prosper after coronavirus - despite nearby Hull being named as one of the places with the “most to fear” from the economic downturn in new analysis by the cross-party thinktank the Social Market Foundation.

The first phase of the 200 development will open in 2023.

“I appreciate the scale of the challenge. There is absolutely no doubt that coronavirus has been and will be very difficult for our country. But we are going to get through it very well by investing in infrastructure, technology and education and bouncing forward as far as we possibly can.”

During his site visit, Mr Johnson met with apprentices as the Government pledged £111m towards a traineeship initiative for young people.

Businesses offering the unpaid placements in England will receive a £1,000 bonus per trainee.

Meanwhile, it was also reported that Mr Sunak will exempt the majority of home-buyers from paying stamp duty.

The Times reported that the Chancellor would outline plans this week to raise the threshold at which people start paying stamp duty from £125,000 to as high as £500,000.

As part of the traineeship initiative, which lasts from six weeks to six months, young people receive maths, English and CV writing training as well as guidance about what to expect in the workplace.

The £111 million schemes include unpaid work experience but trainees will continue to be eligible to receive welfare payments during their course.

The expanded scheme will be in place in England from September 2020.

The Government said it will also provide £21 million to the devolved administrations in Scotland, Wales and Northern Ireland for similar initiatives.

Also, work academies are to get a £17 million investment.

Funding is being provided for more than 30,000 extra places at sector-based work academies, the Treasury said.

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