News | Legal News

10 March 2017

Government ‘partial U-turn’ after revolt over National Insurance hike

The Prime Minister is being accused of a partial U-turn after stalling on plans to implement the controversial rise in National Insurance.

Theresa May has defended the "fair" change but says the Chancellor will listen to concerns raised by MPs and there will be no vote until the autumn.

Shadow chancellor John McDonnell says the PM's comments amount to a "partial U-turn" and demonstrate that the Government is in "disarray".

The change of direction comes amid a potential Tory revolt following the announcement during Wednesday's Budget that Class 4 National Insurance Contributions (NICs) will increase from 9% to 10% in April 2018, and to 11% in April 2019.

If given the go-ahead, the move would have a significant economic impact on self-employed workers, to the tune of £2 billion.

Senior Tory minister and whip Guto Bebb says the Government should apologise for breaking its 2015 manifesto promise not to increase NICs.

Speaking to BBC Radio Cymru, he said: "I believe we should apologise."

However, Mrs May insists the plans are vital to close the gap between the amount of tax paid by those in "traditional" employment and the self-employed.

During a press conference in Brussels on Thursday night, Mrs May said a package of measures will ease the tax burden on low-paid self-employed workers.

The PM said there will be a paper this summer to spell out the full details of the reforms.

Kathryn Fielder

Kathryn Fielder

Tel: 01753 279029

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