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| Version 1 | Version 2 |
|---|---|
| U-turn over Budget plan to increase National Insurance | U-turn over Budget plan to increase National Insurance |
| (35 minutes later) | |
| Plans to increase National Insurance levels for self-employed people - announced in the Budget last week - have been dropped. | Plans to increase National Insurance levels for self-employed people - announced in the Budget last week - have been dropped. |
| Chancellor Philip Hammond has said the government will not proceed with the increases which were criticised for breaking a 2015 manifesto pledge. | Chancellor Philip Hammond has said the government will not proceed with the increases which were criticised for breaking a 2015 manifesto pledge. |
| In a letter to Tory MPs, he said: "There will be no increases in... rates in this Parliament." | In a letter to Tory MPs, he said: "There will be no increases in... rates in this Parliament." |
| Labour's Jeremy Corbyn said the U-turn showed a government "in chaos". | Labour's Jeremy Corbyn said the U-turn showed a government "in chaos". |
| Mr Hammond had faced a backlash by Conservative backbenchers, who accused him of breaking a general election manifesto commitment not to put up National Insurance, income tax or VAT. | Mr Hammond had faced a backlash by Conservative backbenchers, who accused him of breaking a general election manifesto commitment not to put up National Insurance, income tax or VAT. |
| In his letter explaining his change of heart, the chancellor said: "It is very important both to me and to the prime minister that we are compliant not just with the letter, but also the spirit of the commitments that were made. | In his letter explaining his change of heart, the chancellor said: "It is very important both to me and to the prime minister that we are compliant not just with the letter, but also the spirit of the commitments that were made. |
| "In the light of what has emerged as a clear view among colleagues and a significant section of the public, I have decided not to proceed with the Class 4 NIC measure set out in the Budget." | "In the light of what has emerged as a clear view among colleagues and a significant section of the public, I have decided not to proceed with the Class 4 NIC measure set out in the Budget." |
| 'Embarrassing U-turn' | |
| Mr Hammond's Budget announcement would have increased Class 4 NICs from 9% to 10% in April 2018, and to 11% in 2019, to bring it closer to the 12% currently paid by employees. | Mr Hammond's Budget announcement would have increased Class 4 NICs from 9% to 10% in April 2018, and to 11% in 2019, to bring it closer to the 12% currently paid by employees. |
| He said "most commentators" believed the "sharp increase" in self-employment over the last few years had in part been "driven by differences in tax treatment". | |
| But during Prime Minister's Questions, Mr Corbyn said of the U-turn: "It seems to me like a government in a bit of chaos here - a Budget that unravelled in seven days." | But during Prime Minister's Questions, Mr Corbyn said of the U-turn: "It seems to me like a government in a bit of chaos here - a Budget that unravelled in seven days." |
| He said the government should "apologise" for the stress the announcement had caused Britain's 4.8m self-employed. | He said the government should "apologise" for the stress the announcement had caused Britain's 4.8m self-employed. |
| In response Prime Minister Theresa May said that she would not take lessons from the Labour leader on many things, but on creating "chaos", she could. | |
| The SNP's Westminster leader Angus Robertson accused ministers of a "screeching, embarrassing U-turn" - while Labour's shadow chancellor John McDonnell tweeted that the chancellor's authority had been "shredded". | |
| Corbyn car crash? | |
| Liberal Democrat leader Tim Farron, an advocate of Britain remaining in the EU, questioned whether the chancellor would "now U-turn on another broken election commitment to keep us in the single market". | |
| Labour MP Louise Ellman said the government had been "very wise" in dropping the self-employed NICs hike now "rather than have it voted down". | |
| "I would like to hear from the chancellor reassurances that the £2bn promised for social care that was going to come from these tax increases is not going to be withdrawn," she told the BBC. | |
| BBC assistant political editor Norman Smith said the proposal suggested "a lack of political sophistication", with Mr Hammond not realising the storm his announcement would provoke. | BBC assistant political editor Norman Smith said the proposal suggested "a lack of political sophistication", with Mr Hammond not realising the storm his announcement would provoke. |
| He added he was surprised Mr Corbyn had not used all six of his questions at PMQs on what had been "a massive story - a huge, hulking U-turn" on a tax rise. | |
| Alastair Campbell, Tony Blair's former director of communications, added: "Unless the Corbyn team actually planned for that to be a car crash, the inquest should be long, hard and honest. He just can't do it." | |
| Mr Hammond is due to make a statement on the subject to MPs from about 13:45 GMT. |