MPs not appeased by May’s decision to review self-employed tax hike

Culture

Backbenchers unhappy at plans to increase national insurance for the self-employed promised to rebel against the introduction of the tax rise in the autumn, after Theresa May said on Thursday she would delay a vote on the issue.

The prime minister hoped her announcement that the centrepiece of Philip Hammond’s first budget would be reviewed over the summer had defused a row which threatened government defeat on the issue.

But May’s insistence that she would not shift on the substance of the change – a rise in self-employed national insurance contributions (NICs) from 2018 to bring them in line with rates paid by employed workers prompted renewed opposition.

Stephen McPartland, the Stevenage MP who opposes the measure, said May’s concession of introducing improved benefits for the self-employed was not enough reason to break a 2015 manifesto commitment.

“I think these ordinary working families have taken a risk to set up a small business, many of which employ apprentices and are the backbone of our economy, and I welcome the prime minister’s announcement that there’s going to be a review,” he said.

“But I don’t think it deals with the actual key problem, and I feel the chancellor needs to do a U-turn and … needs to do it quickly.”

One source in touch with Conservative MPs unhappy with the plan added that up to 30 could vote against an autumn bill imposing the changes, with an estimated 30 more staying away, potentially bringing a heavy defeat for a government with a working majority of 17.

May had acted swiftly to tackle the unrest, announcing at a summit in Brussels that the decision would be delayed until the autumn, allowing compensatory changes, as well as allowing consideration of an upcoming official report on the changing nature of the labour market.

However, she said the NICs change would still take place, with her spokesman reiterating this point on Friday.

Many of the MPs who have spoken out publicly about the policy are Eurosceptics. One moderate Conservative MP blamed a powerful “caucus” of pro-Brexit backbenchers for exploiting Hammond’s discomfort to flex their muscles, with the EU exit negotiations due to start within weeks.

“They’re a well-oiled, well-tuned machine and they’re utterly ruthless,” the backbencher said. However, Steve Baker, of the European Research Group, which coordinates pro-Brexit MPs, described that as “ludicrous”.

One backbencher said a number of MPs were instead blaming the chief secretary to the Treasury, David Gauke, the only member of the team with long experience in the department.

“This plan is probably in a civil servant’s bottom drawer, they bring it out every year, and it gets kicked into touch,” the MP said. “Hammond’s focused on spreadsheets – most people think Gauke should have said, ‘We’ve been saying no to this for seven years’.”

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