Hammond’s big U-turn over National Insurance increases for self employed

Chancellor Philip Hammond has performed a spectacular U-turn over plans to increase National Insurance levels for self-employed people – announced in his Budget.

Hammond’s move last week drew widespread criticism, much from his own Conservative Party ranks, 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 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.”

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.

But during Prime Minister’s Questions, 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 4.8 million self-employed.