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U-turn over Budget plan to increase National Insurance | |
(35 minutes later) | |
Plans to increase National Insurance levels for self-employed people - announced in the Budget last week - have been dropped. | Plans to increase National Insurance levels for self-employed people - announced in the Budget last week - have been dropped. |
Chancellor Philip Hammond has said the government will not proceed with the increases which were criticised for breaking a 2015 manifesto pledge. | |
In a letter to Tory MPs, he said: "There will be no increases in... rates in this Parliament." | |
Labour's Jeremy Corbyn said the U-turn showed a government "in chaos". | |
Mr Hammond had faced a backlash by Conservative backbenchers, who accused him of breaking a general election manifesto commitment not to put up National Insurance, income tax or VAT. | |
In his letter explaining his change of heart, the chancellor said: "It is very important both to me and to the prime minister that we are compliant not just with the letter, but also the spirit of the commitments that were made. | |
"In the light of what has emerged as a clear view among colleagues and a significant section of the public, I have decided not to proceed with the Class 4 NIC measure set out in the Budget." | |
Mr Hammond's Budget announcement would have increased Class 4 NICs from 9% to 10% in April 2018, and to 11% in 2019, to bring it closer to the 12% currently paid by employees. | |
But during Prime Minister's Questions, Mr Corbyn said of the U-turn: "It seems to me like a government in a bit of chaos here - a Budget that unravelled in seven days." | |
He said the government should "apologise" for the stress the announcement had caused Britain's 4.8m self-employed. | |
BBC assistant political editor Norman Smith said the proposal suggested "a lack of political sophistication", with Mr Hammond not realising the storm his announcement would provoke. |