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May and Hammond face serious Tory revolt over tax on self-employed May and Hammond face serious Tory revolt over tax on self-employed
(35 minutes later)
Theresa May and Philip Hammond are facing a growing rebellion among Tory MPs over the decision to increase national insurance contributions (NICs) for the self-employed in Wednesday’s budget.Theresa May and Philip Hammond are facing a growing rebellion among Tory MPs over the decision to increase national insurance contributions (NICs) for the self-employed in Wednesday’s budget.
A Guardian tally of Conservative MPs known to have expressed opposition to the decision either publicly or in private found 18 who could potentially oppose it – greater than the government’s working majority of 17.A Guardian tally of Conservative MPs known to have expressed opposition to the decision either publicly or in private found 18 who could potentially oppose it – greater than the government’s working majority of 17.
The former Conservative leader Iain Duncan Smith said he would like the plan reviewed at the next budget, in the autumn, to consider issues such as the upcoming Taylor report on modern employment, which will look at the so-called gig economy and the self-employed.The former Conservative leader Iain Duncan Smith said he would like the plan reviewed at the next budget, in the autumn, to consider issues such as the upcoming Taylor report on modern employment, which will look at the so-called gig economy and the self-employed.
“I would like to see that kept, the ball in play, because it doesn’t land until next year, so there is plenty of scope to look how this actually affects them and to listen to business representatives,” he said.“I would like to see that kept, the ball in play, because it doesn’t land until next year, so there is plenty of scope to look how this actually affects them and to listen to business representatives,” he said.
One of these who is understood to have expressed private worries about the proposal, is a cabinet minister. One of these who is understood to have expressed private worries about the proposal is a cabinet minister.
The concerns centre both on the perception such a move unfairly targets the self-employed and entrepreneurial, and also that the 2015 Conservative manifesto specifically ruled out rises to income tax, VAT or NICs before 2020. The concerns centre both on the perception that such a move unfairly targets the self-employed and entrepreneurial, and also that the 2015 Conservative manifesto specifically ruled out rises to income tax, VAT or NICs before 2020.
While it is by no means certain all or even most of the MPs expressing reservations would vote in parliament against the NICs changes, the numbers place pressure on May and Hammond to rethink a policy which has dominated reaction to an otherwise low-key budget.While it is by no means certain all or even most of the MPs expressing reservations would vote in parliament against the NICs changes, the numbers place pressure on May and Hammond to rethink a policy which has dominated reaction to an otherwise low-key budget.
Defending the plan to raise the rate on class four NICs paid by the self-employed from 9% to 10% next year, with a further increase to 11% in 2019, Hammond argued it was fair to unify the rate with that paid by employees.Defending the plan to raise the rate on class four NICs paid by the self-employed from 9% to 10% next year, with a further increase to 11% in 2019, Hammond argued it was fair to unify the rate with that paid by employees.
Speaking on BBC1’s Breakfast, Hammond rejected the idea he had broken a promise and said the issue was dealt with in legislation after the Tories’ election victory. “No one objected, no one raised any issues about it,” he said of the parliamentary discussions. “We regard that issue as dealt with – we dealt with it in 2015.” Speaking on BBC1’s Breakfast show, Hammond rejected the idea he had broken a promise and said the issue was dealt with in legislation after the Tories’ election victory. “No one objected; no one raised any issues about it,” he said of the parliamentary discussions. “We regard that issue as dealt with – we dealt with it in 2015.”
Speaking on BBC Radio 4’s Today programme, Hammond said the 2015 manifesto had been “a broad commitment to lock taxes”, but that circumstances had changed, particularly over leaving the EU.Speaking on BBC Radio 4’s Today programme, Hammond said the 2015 manifesto had been “a broad commitment to lock taxes”, but that circumstances had changed, particularly over leaving the EU.
“As the chancellor now, I am working within an extremely constrained environment where we face some new challenges in this country,” he said.“As the chancellor now, I am working within an extremely constrained environment where we face some new challenges in this country,” he said.
But Guto Bebb, the junior Wales Office minister who is also a whip, told BBC Radio Cymru: “I believe we should apologise. I will apologise to every voter in Wales that read the Conservative manifesto in the 2015 election.”But Guto Bebb, the junior Wales Office minister who is also a whip, told BBC Radio Cymru: “I believe we should apologise. I will apologise to every voter in Wales that read the Conservative manifesto in the 2015 election.”
A number of backbenchers went further, saying the plan, which is intended to raise an extra £1.7bn a year once it comes into force in April 2018, should be dropped or revised.A number of backbenchers went further, saying the plan, which is intended to raise an extra £1.7bn a year once it comes into force in April 2018, should be dropped or revised.
Anne-Marie Trevelyan, the MP for Berwick-upon-Tweed, told Today that she wanted Hammond to change his mind. “We need to halt this particular decision now,” she said. “I think we need to put this on hold so we can have a proper review and think in a holistic way.” Anne-Marie Trevelyan, the MP for Berwick-upon-Tweed, told Today she wanted Hammond to change his mind. “We need to halt this particular decision now,” she said. “I think we need to put this on hold so we can have a proper review and think in a holistic way.”
Speaking in the second day of the budget debate in the Commons on Thursday, the Harrow East MP, Bob Blackman, said the government should “look at this very, very carefully”. Speaking on the second day of the budget debate in the Commons on Thursday, the Harrow East MP, Bob Blackman, said the government should “look at this very, very carefully”.
He said: “There was a solemn promise in the manifesto not to increase national insurance rates. And the reality is, I worry, that the accusation could be made that it’s a bit like signing a contract but failing to look at the fine print.”He said: “There was a solemn promise in the manifesto not to increase national insurance rates. And the reality is, I worry, that the accusation could be made that it’s a bit like signing a contract but failing to look at the fine print.”
The Stevenage MP, Stephen McPartland, said: “These families and businesses are the backbone of our economy. The chancellor needs to do a U-turn and quickly.”The Stevenage MP, Stephen McPartland, said: “These families and businesses are the backbone of our economy. The chancellor needs to do a U-turn and quickly.”
Other MPs to express concerns publicly included Jacob Rees-Mogg, Anna Soubry, Bob Neill, Dominic Raab, Andrew Murrison, Tom Tugendhat, Nigel Mills, John Redwood and Martin Vickers. At least five more, among them a cabinet minister, have indicated some opposition to the move.Other MPs to express concerns publicly included Jacob Rees-Mogg, Anna Soubry, Bob Neill, Dominic Raab, Andrew Murrison, Tom Tugendhat, Nigel Mills, John Redwood and Martin Vickers. At least five more, among them a cabinet minister, have indicated some opposition to the move.
The Labour MP Chris Leslie wrote on Thursday that the Commons library had told him any national insurance changes had to be passed in a dedicated bill, which could be vulnerable to rebellion.The Labour MP Chris Leslie wrote on Thursday that the Commons library had told him any national insurance changes had to be passed in a dedicated bill, which could be vulnerable to rebellion.
However, others say the change could be tacked onto the government’s current finance bill, which would be less politically risky. However, others say the change could be tacked on to the government’s current finance bill, which would be less politically risky.
Labour has promised to oppose the change, with the shadow chancellor, John McDonnell, saying he hoped sufficient Conservative unrest could push Hammond into reversing.Labour has promised to oppose the change, with the shadow chancellor, John McDonnell, saying he hoped sufficient Conservative unrest could push Hammond into reversing.
“Certainly the Labour party will oppose this,” McDonnell told Breakfast. “I think other parties will as well. We may be able to persuade enough Conservative MPs to ask the chancellor now to think again.”“Certainly the Labour party will oppose this,” McDonnell told Breakfast. “I think other parties will as well. We may be able to persuade enough Conservative MPs to ask the chancellor now to think again.”
The Liberal Democrats are also opposed, with their party leader, Tim Farron, saying ministers faced “a humiliating defeat over this OmNICshambles budget” and should change course.The Liberal Democrats are also opposed, with their party leader, Tim Farron, saying ministers faced “a humiliating defeat over this OmNICshambles budget” and should change course.
May’s spokesman said the prime minister had complete confidence in Hammond, and in Bebb after his comments. Asked about the NICs measure, he said: “This is a manifesto commitment that was met.”May’s spokesman said the prime minister had complete confidence in Hammond, and in Bebb after his comments. Asked about the NICs measure, he said: “This is a manifesto commitment that was met.”