Boris Johnson to defend Hammond's Budget in Commons debate amid NICs backlash

Mar 13, 2017, 01:16
Boris Johnson to defend Hammond's Budget in Commons debate amid NICs backlash

Downing Street has insisted Theresa May remains fully committed to reforming National Insurance for the self-employed - despite offering an apparent concession in the face of a backbench revolt.

What has been so damaging is not so much the staged 2 per cent rise in contributions as the strong hint that he is considering going far further and equalising, as he sees it, the NI contributions of employed and the self-employed in the name of "fairness".

Treasury Minister David Gauke will sum up for the Government.

It is understood the Government will publish a paper detailing plans to extend employment benefits to the self-employed in the summer.

The Chancellor is coming under pressure from some Conservative MPs to rethink the £240-a-year hit on 2.5 million self-employed workers, while Labour accused him of a clear breach of the Tory manifesto pledge not to increase National Insurance contributions (NICs) for five years.

He fumed: "This change is not acceptable, this change effects those ordinary working families, who have taken a risk in setting up a small business".

South Staffordshire MP Mr Williamson said: "People have to understand that if we are spending multiple billions of pounds on social care and vocational training and other vitally important things, there is obviously a need to raise appropriate levels of funding".

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May told a Brussels press conference during an European Union summit on Thursday evening: "The shift to self-employment is eroding the tax base and making it harder to pay for the services that ordinary families depend on".

So, if you watched Mr Hammond's first - and last - Spring Budget and thought "Tonight thank God it's the self-employed instead of me" you have really missed the point. I think it is fair to close the gap in contributions between two people doing the same work and using the same public services to make the same contribution to wider society'.

The rebellion by Tory backbenchers over the changes has grown to about 20 MPs.

In his Budget speech today Hammond said the dividend allowance, introduced by his predecessor George Osborne, represented an "extremely generous tax break". Welsh Office junior minister Guto Bebb could be facing the sack for declaring in a radio interview: "I think we should apologise".

Ian Cass, chief executive of the Forum of Private Business, said the increased tax rate on dividends for business owners is a blow to United Kingdom entrepreneurs.

John McDonnell, Labour's shadow chancellor, urged Tory MPs to join Labour in opposing the NIC increases.

He added that May should "show some leadership, rather than this partial U-turn, and just scrap these tax rises for low and middle earners altogether".