The Tory rebellion over the tax hike on the self-employed isn’t abating, it is intensifying as I say in The Sun this morning. As one Cabinet Minister tells me, Tory MPs ‘left the Budget feeling a little bit concerned. They’ve seen the papers, and thought this isn’t good. After the emails and constituency stuff, there’ll be even more nervous’. One Tory backbencher, who is a good judge of the mood of the parliamentary party, says ‘People are not happy at all. Somethings’ got to change’.
But Philip Hammond is digging in. He is ‘absolutely determined not to retreat on this’ according to one Cabinet ally of his. He has, I’m told, been ‘surprised by the extent of the backlash’. Indeed, on Wednesday night he went out of his way to reassure Tory MPs that they could defend the policy safe in the knowledge that the government wasn’t going to back down.
Number 10, though, are already playing for time which is why the vote on this tax rise won’t be until the autumn. One senior source tells me that ‘the first thing you’ve got to do when there’s big concern is explain yourself better’.
But given how strongly many Tory MPs feel about this issue they didn’t go into politics to put up taxes on the self-employed, and the fact that it breaches a manifesto commitment it is unlikely that a better explanation will solve the problem. At which point, I expect Number 10 to look at ways to mitigate the policy.
Any retreat on the centrepiece of Hammond’s first Budget, though, will undercut his credibility as Chancellor. As one Cabinet Minister observes we are about to get an ‘interesting look at how much power the Treasury has now’.
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