Chancellor scraps plans to increase National Insurance Contributions payable by the self-employed.
It bore the brunt of Budget criticism from commentators, the public and even Tory party backbenchers, and Philip Hammond has now bowed to the pressure and scrapped his plans to increase NIC for the self-employed. Just one week to the day since Mr Hammond announced the hike in payments, he has performed a dramatic U-turn and confirmed that the plans will now not be implemented. Shadow Chancellor John McDonnell has called the about-face “shocking and humiliating” and believes that self-employed people have been put “through the mangle” this week: as a result of the plans 1.6 million people would have been paying, on average, £240 more per year. The U-turn comes with no apology from the Chancellor.
His own party complained heavily at the impact the changes would have on small businesses, described by Mr Hammond himself as “the entrepreneurs and innovators who are the lifeblood of our economy”. It was argued that the changes would stifle enterprise and risk taking. The Chancellor defended the increases by drawing attention to the fact that self-employed people now have much the same pension and benefit rights as those in ‘full’ employment, so the disparity in National Insurance rates can no longer be justified; the changed system would be deemed fairer.
