Johnson admits he does not know NI rate


Oliver Wright
Monday 10 January 2011 01:00

The shadow Chancellor, Alan Johnson, was forced to admit yesterday he did not know what the UK's national insurance tax rate was, an admission seized upon as his latest public slip-up.

Mr Johnson at first tried to avoid answering the question during an interview on Sky News.

But when pressed, he claimed the National Insurance rate was 20 per cent – prompting a correction from the presenter Dermot Murnaghan, who pointed out that it was 12.8 per cent.

Mr Johnson, who does not have an economics background, was a surprise choice as Shadow Chancellor ahead of shadow Cabinet colleagues Ed Balls and Yvette Cooper, both of whom do.

Since being given the job he has alarmed some Labour figures with his apparent lack of grasp of his brief and lacklustre performances.

In an interview last week on the Today programme with the BBC's former economics editor, Evan Davis, Mr Johnson struggled to explain how long it would take to eliminate the deficit under Labour's policy. First he suggested it could be done by 2015, before later saying he "probably" meant 2016.

Later, referring to Labour's last budget, he told Mr Davis: "You'll know it very well, you've probably read more of it than I have."

In a separate radio interview he appeared not to know when Labour's own economic cuts would kick in. More recently, while condemning the Coalition's economic policy, he seemed to think that VAT was levied on food: "Imagine your child's trust fund has gone and your child benefit's frozen and your jobs gone and you're paying more for your food because of the hike in VAT." VAT has never been levied on food.

Mr Johnson has always had a reputation as a confident media performer. But despite a series of senior jobs while in government, including Heath Secretary and Education Secretary, he had the reputation among some in the civil service for not always being on top of his brief and having limited a grasp of detailed policies.

Party officials are concerned that at a time when the economy is so central to the political debate, Mr Johnson may have been the wrong choice as Shadow Chancellor. They fear that he will struggle to define and sell a credible economic programme as an alternative to the Coalition – a key battleground at a general election. "The problem is that nobody really sees him as the next Chancellor," said one source.

But a spokesman for the Opposition leader, Ed Miliband, said his team was not bothered by Mr Johnson's supposed gaffes. "This is a Shadow Chancellor who lives in the real world," he said. "He know the difference between progressive and regressive tax and how difficult it is to get along in the world."

Interview extract

Dermot Murnaghan: I am interested Mr Johnson, you were when you took the job, as you said, a bit of an economic novice. I just wondered if the shadow Chancellor knows what the current rate of employers' National Insurance is.

Alan Johnson: The accusation of economic novice is that when you take over a new job, you have to ensure that you bone up on these things.

Murnaghan: Pretty basic element of the tax system though isn't it?

Johnson: Yes, it's going up by 1 per cent.

Murnaghan: From?

Johnson: From 20 per cent to 21 per cent.

Murnaghan: Sorry, National Insurance, employers' secondary class-one rate for employers stands at 12.8 per cent.

Johnson: 12.8 per cent.

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