Downing Street hints at National Insurance climbdown after Tory revolt

Posted On: 
9th March 2017

Downing Street today refused to confirm that a rise in National Insurance contributions for the self-employed will definitely go ahead following a backlash by Tory MPs.

Philip Hammond outside 11 Downing Street ahead of yesterday's Budget.
Credit: 
PA Images

 A furious row erupted last night after Philip Hammond used his first Budget to announce the hike in so-called "Class 4" NICs. The change will see nearly 2.5m people left paying £240 a year more.

That was despite a promise in the 2015 Conservative election manifesto that a range of taxes - including National Insurance - would not rise for at least five years.

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Several Tory backbenchers have already broken ranks to say they cannot support the change, which will require a new law to bring it into effect. Labour has already said it will vote against the move.

At a briefing for journalists this morning, a spokesman for the Prime Minister failed four times to confirm that the rise will be implemented.

He also avoided two opportunities to confirm that Theresa May believes politicians should always keep their promises.

The spokesman said: "The point of this exercise is about restoring a sense of fairness. Self-employed workers are able to now have access to the full state pension - that makes them £1,800 a year better off.

"Having equalised the state pension system, it is right that the contributions that go towards that are equalised as well.

"We need to remind ourselves what this Budget is all about. It's building for the future, it's a Budget that invests in schools, skills, social care and business, and it addresses an issue of fairness around the system."

On ITV's Good Morning Britain today, Mr Hammond insisted "circumstances have moved on" since the 2015 election.

However, he also refused to confirm that the NICs increase will go ahead.

Tory MP Anne-Marie Trevelyan said: "It goes against every principle of Conservative understanding of business. We understand that taking risks is what stimulates growth,"

Former minister Anna Soubry said: "This could be first U-turn. This will not be popular and many will argue it’s unfair."

Former Conservative leader Iain Duncan Smith today called for a review of the plans before they are implemented.

He said: "I would like for this period to have a chance to reflect on that, to think about how this lands and whether or not you want to look at adjustments, at whether £16,000 is the right level to be at - that’s below average earnings - and whether there should be adjustments."

Tory backbencher Stephen McPartland said the planned rise is "not acceptable" and looks like a broken promise.

He said: "I think on this issue we need to get a U-turn and we need one quickly. I believe, the National Insurance contributions changes are going to be put forward in a separate bill and that’s what we need to look at changing, but I think we need to keep the pressure up over the next few days so people understand this change is not acceptable, this change affects those ordinary working families who’ve taken the risk of setting up a small business, many of whom employ apprentices and are the backbone of our economy.

"It just makes them feel we’ve broken our promise, it’s not acceptable, it cannot be allowed to proceed."