Chancellor Philip Hammond returns from his summer holiday to screw over millions of workers
Politicians have only just returned to parliament following their summer break. But millions of self-employed workers will wish they stayed away. Because it’s only taken days for chancellor Philip Hammond to announce a U-turn on a tax break for self-employed workers.
Back in 2015, former chancellor George Osborne promised a tax cut in Class 2 National Insurance contributions for self-employed people. It was supposed to save workers earning between £6,205 and £8,424 an estimated £134 a year. In 2017, Hammond made his first U-turn. He announced that it would be implemented in April 2018 instead of April 2019.
But now, he has scrapped the cut entirely. Sources vary, but the U-turn will affect between 2.7m and 3.4m workers. Shadow chancellor John McDonnell described the move as a “betrayal”:
Hammond's NICs tax hike is yet another betrayal of the self-employed.
Despite earning significantly lower today than they were in 2010, the self employed now face further tax rises while giant corporations see their tax bills slashed.
— John McDonnell MP (@johnmcdonnellMP) September 6, 2018
Self-employed people already live with financial insecurity. From not knowing when the next contract will come in to not having sick or holiday pay, it is a precarious situation:
It gets harder to make a living! I don't mind paying my tax. But as a self empolyed person with no fall back if I become ill I don't see how I can be expected to pay as much as an directly empolyed worker. Government is out of touch.
— Jacqueline Wales (@JacquelineWale1) September 6, 2018
Political rhetoric will ramp up about how #selfemployed pay less tax than employed.
Self-employed lead significantly more precarious lives than those in everyday employment, & use public services less frequently & some (sick pay) not at all. https://t.co/P4CR2svg74
— Mark Hooper (@markjhooper) September 7, 2018
No one’s happy
It appears that Hammond has managed to piss off the entire political spectrum. The TaxPayers’ Alliance tweeted:
'Millions of self-employed people in Britain who were promised lower and simpler taxes next year will be extremely disappointed by this announcement."https://t.co/I9FAf6M8BY
— TaxPayers' Alliance (@the_tpa) September 7, 2018
Conservative MP John Redwood was also unhappy:
The various tax attacks we have had from the prev Chancellor & this Chancellor have been damaging to the economy & have had a big impact. I would urge the Govt to go back to a tax cutting agenda that will promote more investment, more growth & more spending. @BBCWorldTonight
— John Redwood (@johnredwood) September 7, 2018
The tabloid press also tore into Hammond with the Sun describing the move as ‘clobbering White Van Man’.
Supporting small businesses?
In 2015, David Cameron introduced his small businesses manifesto. He said small businesses were the ‘backbone of the economy’ and that the Conservative Party were:
grafters and the roofers and the retailers and the plumbers.
But as the Federation for Small Businesses pointed out:
“This raises serious questions once again about the government's commitment to supporting the self-employed” @MikeCherryFSB tells @BBCNews in response to announcement that Class II NICs will remain in place for self-employed https://t.co/FABl56siM0
— FSB (@fsb_policy) September 6, 2018
Time for change
Time and again the Conservative government has screwed over poor people. Whether it’s welfare claimants or self-employed people struggling to make ends meet, one thing is clear. The party only cares about the rich. Surely the time has come when we all agree that it’s time for a change? And then we can start building a country that puts the needs of ordinary people before those of a wealthy elite.
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Featured image via Flickr/Raul Mee
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