Class 4 National Insurance Contributions

Stewart Hosie Excerpts

Wednesday 15th March 2017 Commons Chamber

[Mr Hammond]

In the Budget speech last week, I made it very clear that we were seeking to close the gap a little. We were not seeking to equalise the contributions treatment of the employed and self-employed, as there are very good reasons why there may well need to be a gap. That is why we will look at this in the round—contributions, entitlements and the way the whole package works for the self-employed. Let us come back to this once we have completed the review, have the Matthew Taylor work and can look at the problem in the round.

[Stewart Hosie (Dundee East) (SNP)]

I said last week that this decision would come back to haunt the Chancellor, and it has, but little did I expect that when it did, No. 10 and No. 11 would be briefing against each other. It is almost as if the halcyon days of Gordon Brown and Tony Blair never really went away. However, I welcome the U-turn today, not least because about 140,000 Scottish self-employed people would have been affected by the proposal, and many of them would have earned slightly below, on or only slightly more than the average wage. I am delighted that the Scottish National party went in to bat for the squeezed middle against this Chancellor.

Today’s U-turn has all the characteristics of the pasty tax, the caravan tax and the omnishambles Budget. The Chancellor said that he would fill the gap in the autumn, and I will listen carefully to what he says then, but will he give us an assurance today that he will not simply find another clever way of dipping into the pockets of modestly paid self-employed people? More importantly, if he changes the tax or national insurance regime for self-employed people in the future, will he have proper consultation in advance with their representatives, so that they are not hit with the uncertainty that they have faced over the past week?

[Mr Hammond]

On the last point, we will, of course, consult people widely over the course of the summer as we carry out the review. The hon. Gentleman will know that it is intrinsic in the Budget process that it is difficult to have any kind of proper consultation when preparing a Budget. He asked about measures in the autumn Budget. I said that all spending measures in the spring Budget would be fully funded by revenue raises or reductions in spending elsewhere in that Budget, so that it was broadly fiscally neutral. As a result of the decision I have announced today, the spring Budget is no longer broadly fiscally neutral, but I am committed to addressing that issue in the autumn. The intention remains to balance the measures that we are delivering between spending and taxation.