I think it was Harold Wilson who once said, “A week is a long time in politics” and never more was this shown than last week. I usually write this column either on a Sunday or Monday morning, to ensure it is with the paper in good time for print deadlines. Last week I talked about the Budget delivered the previous Wednesday (March 8th). I said at the time that, whilst there were good things in it, I and some other colleagues were concerned about the proposed rises to National Insurance Contributions for the self-employed. I felt that, given the disquiet expressed by many of us, the issue would be re-visited before any legislation was brought forward, anticipated at the time to be in the autumn. However, in between the writing of the column and the publication of the paper, the Chancellor has responded to those concerns by cancelling the proposals.
My concerns were two fold. Whilst I understood his point of view, I thought it was a measure that hit people who by nature are entrepreneurial, ambitious and aspirational. Becoming self-employed carries huge risks, you forsake many of the securities that employment brings, as someone once said to me who was self-employed, ‘if I don’t work I don’t earn’ - things like sickness benefits are not available for the self-employed and whilst some of the disparities have been addressed through changes to the pension system, being self-employed still carries risks and challenges.
The second concern over these proposals was the apparent contradiction of the 2015 General Election manifesto promising no rises in Income Tax or National Insurance. Whilst the National Insurance Act 2015 clarified that this lock would apply only to Class 1 contributions, and therefore it could be argued that the proposals technically did not break the manifesto pledge, this seemed disingenuous. As has been said, the rise was not in the spirit of the promise and at a time when the reputation of politics needs some attention, this did nothing to enhance it.
When the Chancellor made his statement to the House, he said that he would look over the summer at ways to replace the money that the changes would have delivered, and I asked him to ensure that, whatever he decided, he would not lose sight of the fact that, as I have already said, the self-employed are the risk takers, the wealth creators and the entrepreneurs that drive our economy.