Tory MPs attack Philip Hammond... but IFS backs his ‘baby steps’

Written by David Singleton on 9 March 2017 in Diary

The IFS verdict is seen as one of the most authoritative comments on the Budget

More than a dozen Conservative MPs have called on the Government to think again about raising National Insurance for the self-employed.

But the Institute for Fiscal Studies has said the chancellor was right to take the steps he did in the Budget.

Tory MPs to have expressed unease about the policy include Iain Duncan Smith; John Redwood; Jacob Rees-Mogg; Dominic Raab; Andrew Bridgen; Anne-Marie Trevelyan; Bob Neill; Tom Tugendhat; Andrew Murrison; Nigel Mills; Martin Vickers; Anna Soubry; Bob Blackman; Matthew Offord; Anne Marie Morris; Stephen McPartland and Guto Bebb.

Bebb, Wales minister and Tory whip, told BBC Radio Cymru: "I believe we should apologise. I will apologise to every voter in Wales that read the Conservative manifesto in the 2015 election."

McPartland told the BBC's Daily Politics: "I think on this issue we need to get a U-turn and we need one quickly… This change affects those ordinary working families who’ve taken the risk of setting up a small business, many of whom employ apprentices and are the backbone of our economy. It just makes them feel we’ve broken our promise. It’s not acceptable, it cannot be allowed to proceed."

Meanwhile a spokesman for the prime minister turned down four opportunities this morning to confirm that the changes will definitely happen, increasing speculation that a climbdown is in the offing.

But the IFS suggested the government should stick to its guns as the independent think tank dissects the government's tax and spending plans.

Director Paul Johnson said the current system was unfair.

“A tax system which charges thousands of pounds more in tax for employees doing the same job as someone else needs reform," he said.

"These [NI changes] feel like like baby steps in the right direction. But they are sticking plasters not the fundamental look at the tax base as well as tax rates that is required."

The NI rise will see millions of self-employed workers pay an average of £240 a year more, but ministers say those earning £16,250 or less will see their NI contributions fall.


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