I hate to admit this, but Hammond’s proposed increase in national insurance contributions (NICS) for the self employed wasn’t such a bad idea.
It would have been a modest, progressive increase in the national insurance contributions paid by the better-off self-employed while abolishing the £2.85 per week flat-rate contribution paid by those earning less than £16,250.
It would have raised a much-needed £2 billion in a relatively fair way, recognising that structure of NICs is a major driver in the growth of self-employment. An employer who can persuade a worker to become a self-employed contractor immediately saves paying 13.8% national insurance, while the newly self-employed contractors’ payments fall from 12% to 9%.
Hammond’s enforced (by May) U-turn now leaves a £2 billion hole in public finances, with no obvious means of plugging it.
But for the hard-right Brexiteers and their baying press, Hammond’s plan was a betrayal not only of their beloved “white van man”, but also of the low-tax, low public spending, de-regulated post-Brexit economy they crave. Their shrill and sustained public opposition, reflected in the screaming headlines and outraged editorials of the pro-Brexit press, ensured a swift and ignominious climb-down.
Polly Toynbee (not always a favourite here at Shiraz), writing in the Guardian before this fiasco, noted that for all her supposedly intransigent posturing, “Theresa May … never knowingly opposes the will of the Mail … indeed it might save a lot of time if she simply asked Paul Dacre and Rupert Murdoch what if any compromises they will stomach to get a deal, and do what they say.”
Toynbee was writing about the Brexit negotiations, but her comments evidently apply to all aspects of the present government’s policies.
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Shiraz Socialist 
Mick said,
March 16, 2017 at 8:21 pm
It was a pretty good idea, yes. And even if the tax hike really was the biggest crime of the century against the self-employed, the Tories still also gave them access to the state pension and tax benefits. Phillip Hammond must be feeling frustrated. You can’t say he’s doing a bad job.
Labour made a noise about a u-turn but that’s way more listening from the Tories than you get with the left. Also, our onetime emperors are naked again because for all the racket they make about austerity and deficits, the last Labour government provided the mess the Tories had to clean up – with public backing. There were two recessions after Blair, remember, with no cash reserves to cushion us after sub-prime.
Glasgow Working Class said,
March 16, 2017 at 10:27 pm
I would have thought that in the past Labour, Liberals and even the so called socialist! Tartan Tories would have wanted all working people to pay a reasonable fair share in contributions. PAYE do not have private consultants to fiddle sorry adjust the books for them.
Mick said,
March 17, 2017 at 1:18 pm
Labour can only damage themselves by criticising all this. For people like them, especially socialists, the answer to everything at bottom is just more tax.
And though the word ‘progressive’ is now Orwellian, thanks to the actual loony left, there was a very logical approach to all this by the Chancellor. Technically, that’s how it should be for good balance-sheeting but the politics of the office has bitten him today.