Given that Jeremy Corbyn barely seemed to notice Philip Hammond’s Budget blunder, it’s unlikely the Chancellor will be too worried about Labour’s response to the National Insurance rates row. He will be troubled, though, by the rumblings on the backbenches behind him. The prospect of a Tory revolt is now very much on the cards; 18 Conservative MPs – including former leader Iain Duncan Smith and Tory whip Guto Bebb – have publicly spoken out against the policy. Because Tory MPs were voted in on a manifesto pledge not to raise NI contributions – and will inevitably be getting it in the neck from angry constituents over the coming days – this number is likely to rise.
With a wafer-thin working majority of just 17, Philip Hammond and the Government can ill-afford a row. What’s more, because changes to National Insurance contributions cannot form part of the broader Budget bill and must be legislated for separately, the prospect of Tory MPs voting down this policy is even more likely. Here’s the full list of the Conservative MPs who have voiced their opposition to Philip Hammond’s National Insurance rate rise:
Tory whip Guto Bebb said the Government should say sorry for its broken promise. He said:
‘I believe we should apologise. I will apologise to every voter in Wales that read the Conservative manifesto in the 2015 election.’
Iain Duncan Smith urged the Government to keep the planned hike under review:
Conservative MP Anne-Marie Trevelyan could not have been more damning of the changes when she was interviewed on the Today programme this morning. She said:
‘I am concerned that this is both a break in our manifesto commitment but it (also) goes against the whole essence of what Conservatives believe in, which is encouraging those to take responsibility, to set up businesses to be the nursery for growth for future larger businesses, and if we start to hammer down on the National Insurance contribution framework we are disincentivising those who are willing to take their own risks and be self-employed and get out there and grow new business.’
Here’s her full interview:
Jacob Rees-Mogg had this to say in the Commons yesterday:
‘I urge the Government to look at the whole question of the relationship between national insurance and income tax in the round. National insurance represents about £130 billion of revenue. It is an enormously important source of funding for what the Government wish to do, but its relationship to income tax creates confusion and distortion within the system. This is just one of those distortions, and I am not sure that making a minor change at the edges is the right way to go about changing the relationship in taxation between the self-employed and the ordinarily employed.’
Dominic Raab urged the Government to ‘look at this in the round to make sure we are not hurting entrepreneurial classes’:
While Nigel Mills said the plans were ‘unwelcome news to those people who are struggling and not getting all the rights they ought to’.
Anne Marie Morris was clear in her criticism:
‘The changes to National Insurance defy belief! What did the chancellor think he was doing?’
Dr Andrew Murrison also spoke out:
‘I have some small concerns about national insurance. On that matter, I find myself in agreement with the concerns expressed by the hon. Members for Nottingham East and for Leeds West (Rachel Reeves). It is very important to ensure that we do not disadvantage self-employed people. The Conservative party always has been and, I hope, always will be the party that supports white van man and—may I say on this particular day?—white van woman.’
Tom Tugendhat said:
‘I find the emphasis on national insurance slightly concerning. I come from a political tradition that believes in small government and low taxes and that seeks to encourage entrepreneurship and enterprise. Although the figures that we are discussing are very minor—a percentage point here and there, or two over two years—they speak to a tone that is not entirely helpful, and in that I urge a rethink.’
John Redwood also voiced his opposition:
‘We should not go out of our way to tax work, enterprise and success. I know we have to do some of that, because we need a lot of revenue for the range of public services we offer, but our taxes on those things are quite high enough.’
Bob Neill – who was one of those to put pressure on the Chancellor over business rates – had this to say:
‘I understand that there are distortions when people are self-employed, but I think this should be kept under review’.
Anna Soubry said the Chancellor will almost certainly have to make a ‘U-turn’ on this policy. She said:
‘This will not be popular and many will argue it’s unfair’.
Martin Vickers said this:
‘I can’t say I’m overjoyed at the action the Chancellor has taken because self-employed people are a great asset to the local and the national economy. You have also got to consider that they sometimes don’t qualify for other benefits. Clearly, the view of the Treasury is that there was an anomaly which needed to be rectified.’
Stephen McPartland said:
‘We are taxing those families who have taken on the risk of setting up their own small business.’
Bob Blackman also criticised the Chancellor’s plans:
‘We have all got a concern that we are going to be hitting people who take the risk of running their own business. Equally, there is a concern that this will hit home shortly before we ask people for their votes in the next general election’.
Matthew Offord criticised the plans. He said:
‘People who work for themselves and who set up and run companies should be encouraged. Instead, the Chancellor has singled them out for a £1,425m tax hike on the misleading premise that they pay less tax than their peers.’
While Andrew Bridgen said of the changes:
‘I don’t think it’s worth it’.
And former Conservative chairman Lord Tebbit described it as a ‘bit of a dog’s dinner’:
‘I think we need to encourage people to be self-employed rather than discourage them’
It’s not only Tories who have spoken out. The party has an effective de facto coalition with the DUP in Parliament. As a result, these comments by the DUP’s Sammy Wilson during yesterday’s debate could add to the Government’s woes:
‘…many self-employed people are struggling at the margins because they are trying to get businesses up and running. The difference in taxation will be significant for them. The Government have got that one wrong. Hopefully, the issue will not come back to bite them; it has not been very well explained.’
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