Philip Hammond has refused to bow to demands from his own MPs for a U-turn on National Insurance hikes for millions of self-employed workers.
The Chancellor faced down protests from at least ten backbenchers, saying: “No Conservative likes to raise taxes of course – and of course I’m always prepared to listen to and talk to our backbenchers.
“But we have made a decision here, to make the National Insurance system a little bit fairer.”
Mr Hammond also sought to shift the argument from claims the increases will hit ‘white van man’ by pointing out “partners in large law firms” were being asked to pay a bit more.
“This is a basic question of fairness to the 85 per cent of the population who work and who get their National Insurance deducted every week from their pay packets,” he told BBC Radio 4's Today programme.
The defiance came despite howls of anger from all sections of the Conservative party and a likely Commons revolt which could yet defeat the measure.
The Budget announcement will see the nine per cent rate of Class 4 NI contributions go up to ten per cent in April 2018 and to 11 per cent a year later.
According to the Treasury, 1.6m self-employed people will pay £240 on average more every year – but no-one earning less than £16,200 will be worse off.
Earlier, Conservative backbencher Anne-Marie Trevelyan become the latest Tory MP to speak out against the change, arguing it was a clear breach of the 2015 party manifesto.
Ms Trevelyan suggested a revolt was already being planned, by bringing forward an amendment to the Finance Bill to strike out the increases.
“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
“Those who are out there working hard at their own risk – no-one is going to be pick up their holiday pay – they have got to be sure that a Conservative Government understands and backs them and doesn’t use them as a cash cow.”
John McDonnell tried to put Labour at the head of efforts to block the NI hikes, insisting a “large number of people don’t want to be in self-employment”.
“I hope a number of Conservative MPs will stand with us and say to the Chancellor ‘think again’”, the Shadow Chancellor said, adding: “We will be opposing this because it is wrong.”
Most damagingly for Mr Hammond, the 2015 Conservative manifesto explicitly ruled out rises in National Insurance, VAT and income tax during the lifetime of the current Parliament.
Everyone the Government blames for the NHS crisis – except themselves
Everyone the Government blames for the NHS crisis – except themselves
1/6 The elderly
“We acknowledge that there are pressures on the health service, there are always extra pressures on the NHS in the winter, but we have the added pressures of the ageing population and the growing complex needs of the population,” Theresa May has said. Waits of over 12 hours in A&E among elderly people have more than doubled in two years, according to figures from NHS Digital.
2/6 Patients going to A&E instead of seeing their GPs
Jeremy Hunt has called for a “honest discussion with the public about the purpose of A&E departments”, saying that around a third of A&E patients were in hospital unnecessarily. Mr Hunt told Radio 4’s Today programme the NHS now had more doctors, nurses and funding than ever, but explained what he called “very serious problems at some hospitals” by suggesting pressures were increasing in part because people are going to A&Es when they should not. He urged patients to visit their GP for non-emergency illnesses, outlined plans to release time for family doctors to support urgent care work, and said the NHS will soon be able to deliver seven-day access to a GP from 8am to 8pm. But doctors struggling amid a GP recruitment crisis said Mr Hunt’s plans were unrealistic and demanded the Government commit to investing in all areas of the overstretched health service.
3/6 Simon Stevens, head of NHS England
Reports that “key members” of Ms May’s team used internal meetings to accuse Simon Stevens, head of NHS England, of being unenthusiastic and unresponsive have been rejected by Downing Street. Mr Stevens had allegedly rejected claims made by Ms May that the NHS had been given more funding than required.
4/6 Previous health policy, not funding
In an interview with Sky News’s Sophy Ridge, Ms May acknowledged the NHS faced pressures but said it was a problem that had been “ducked by government over the years”. She refuted the claim that hospitals were tackling a “humanitarian crisis” and said health funding was at record levels. “We asked the NHS a while back to set out what it needed over the next five years in terms of its plan for the future and the funding that it would need,” said the Prime Minister. “They did that, we gave them that funding, in fact we gave them more funding than they required… Funding is now at record levels for the NHS, more money has been going in.” But doctors accused Ms May of being “in denial” about how the lack of additional funding provided for health and social care were behind a spiralling crisis in NHS hospitals.
5/6 Target to treat all A&E patients within four hours
Mr Hunt was accused of watering down the flagship target to treat all A&E patients within four hours. The Health Secretary told MPs the promise – introduced by Tony Blair’s government in 2000 – should only be for “those who actually need it”. Amid jeers in the Commons, Mr Hunt said only four other countries pledged to treat all patients within a similar timeframe and all had “less stringent” rules. But Ms May has now said the Government will stand by the four-hour target for A&E, which says 95 per cent of patients must be dealt with within that time frame.
6/6 No one
Mr Hunt was accused of “hiding” from the public eye following news of the Red Cross’s comments and didn’t make an official statement for two days. He was also filmed refusing to answer questions from journalists who pursued him down the street yesterday to ask whether he planned to scrap the four-hour A&E waiting time target. Sky News reporter Beth Rigby pressed the Health Secretary on his position on the matter, saying “the public will want to know, Mr Hunt”. “Sorry Beth, I’ve answered questions about this already,” replied Mr Hunt. “But you didn’t answer questions on this. You said it was over-interpreted in the House of Commons and you didn’t want to water it down. Is that what you’re saying?” said Ms Rigby. “It’s very difficult, because how are we going to explain to the public what your intention is, when you change your position and then won’t answer the question, Mr Hunt”. But the Health Secretary maintained his silence until he reached his car and got in.
David Cameron took to the road, repeatedly promising to stand by the pledge – and contrasting it with the “jobs tax” which he claimed a Labour government was planning.
The Chancellor argued the pledge only applied to NI contributions paid by employers and employees – not to the Class 4 type levied on the self-employed.
This became clear when Parliament later passed a law to enact the manifesto commitment, he said.
The measure will only raise £145m a year in the short-term, but the Treasury fears it will lose billions in future unless it acts, as self-employment grows.Reuse content