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| Philip Hammond Does a Quick U-Turn on U.K. Insurance Payments | Philip Hammond Does a Quick U-Turn on U.K. Insurance Payments |
| (35 minutes later) | |
| LONDON — In an about-face that cast a damaging blow to his government’s carefully cultivated image of competence, Britain’s chancellor of the Exchequer, Philip Hammond, withdrew on Wednesday a plan to raise revenue from some self-employed Britons, just one week after it was announced in a budget statement. | |
| The move followed criticism from lawmakers in Mr. Hammond’s Conservative Party who had said that the measure broke a 2015 campaign pledge and penalized some of their supporters. | |
| The extraordinary speed with which the measure was withdrawn highlighted the extent to which attacks have shaken the government of Prime Minister Theresa May as it prepares Britain to exit the European Union, a process known as Brexit. | |
| Mrs. May had already been put on the defensive on Monday when Scotland’s first minister, Nicola Sturgeon, said she would seek a new referendum on Scottish independence because of the prime minister’s handling of Britain’s departure from the bloc. | Mrs. May had already been put on the defensive on Monday when Scotland’s first minister, Nicola Sturgeon, said she would seek a new referendum on Scottish independence because of the prime minister’s handling of Britain’s departure from the bloc. |
| There was more controversy on that issue, too, on Wednesday, when David Davis, the minister in charge of negotiating the terms of the British exit, told lawmakers in a committee hearing that the government had no official assessment of the economic cost of failing to strike a new trade deal with the rest of the European Union. | |
| Mrs. May and Mr. Davis have warned that Britain may have to walk away from negotiations if it cannot get the agreement it wants. | |
| But the political heat may have been felt most directly by Mr. Hammond, whose rapid U-turn surprised lawmakers. Nicknamed Spreadsheet Phil because of his dry personality and focus on detail, Mr. Hammond was regarded as one of the more sure-footed members of the government. | But the political heat may have been felt most directly by Mr. Hammond, whose rapid U-turn surprised lawmakers. Nicknamed Spreadsheet Phil because of his dry personality and focus on detail, Mr. Hammond was regarded as one of the more sure-footed members of the government. |
| In announcing the change in a letter to lawmakers released Wednesday morning, Mr. Hammond acknowledged the criticism of his plans. | In announcing the change in a letter to lawmakers released Wednesday morning, Mr. Hammond acknowledged the criticism of his plans. |
| “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,” he wrote. He did not say how the shortfall in public funds would be made up. | “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,” he wrote. He did not say how the shortfall in public funds would be made up. |
| Speaking in Parliament, the leader of the opposition Labour Party, Jeremy Corbyn, said that the government was in “chaos” and that the budget had begun to unravel in seven days. | |
| In the budget statement last week, Mr. Hammond said that the government would increase the rate of national insurance contributions — the taxes that finance welfare programs and the state pension — for many of the roughly 1.6 million self-employed Britons | In the budget statement last week, Mr. Hammond said that the government would increase the rate of national insurance contributions — the taxes that finance welfare programs and the state pension — for many of the roughly 1.6 million self-employed Britons |
| Currently, their contributions are levied at a lower rate than for others, something that Mr. Hammond had said was “not fair to the 85 percent of workers” who are not self-employed. | Currently, their contributions are levied at a lower rate than for others, something that Mr. Hammond had said was “not fair to the 85 percent of workers” who are not self-employed. |
| However, the increase in national insurance appeared to breach the manifesto of the Conservative Party, which promised before the 2015 election that it would not increase income taxes, value-added tax or national insurance payments. |