On Sky News on Sunday morning, it became clear during questioning by Dermot Murnaghan that the shadow chancellor Alan Johnson did not know what the rate for employers' national insurance is. It is 12.8% although Johnson seemed to think it was 20% at one point.
Tuesday, 11 January 2011
This has been seized upon as a "gaffe" by the media and Johnson's political opponents. Often these situations when a politician makes a slip are hugely overblown by the media and on many occasions I have found myself lamenting the way such things are covered.
However in this case I really do think it is important. I run my own business (along with some partners) and I am responsible for the company's financial affairs. Therefore I regularly have to sign off on financial transactions and also perform calculations based upon people's salaries. I am only too aware that every time the gross salary is considered, you have to multiply by 1.128. So I can look at this situation of the perspective, not of a politico but someone who signs the cheques for a small business.
That the shadow chancellor does not even know what the rate of employers' NI is a very poor show from where I am standing. I know he indicated he was a bit of an economics novice when he first started in the post but he has had months to get up to speed now. At the very least he should know what the different rates are. They should be absolutely at the forefront of his mind, not least because one of their main policies is to raise the NI rate. The fact that he does not means that he is not properly on top of his brief. For the chief opposition finance spokesperson in parliament to not be on top of this will just drive a wedge between him (and his party) and the millions of people in this country who run businesses.
Can you imagine any of the recent holders of the office of shadow chancellor to have been so sketchy on something like this? Alistair Darling, George Osborne, Oliver Letwin, Michael Howard, Michael Portillo are those who have held this post in the last decade and I am sure all of them were fully up to speed with the main rates of tax and NI.
I think Johnson has used up most of his nine lives now. He has caused other problems for Ed Miliband in the last few months and there has been a suspicion that some of them have been deliberate mischief making. This latest one was obviously not deliberate but I suspect the Labour leader's patience is wearing thin.
I would not be surprised if he was shuffled out of his post at the next available opportunity.