UK

Theresa May Defends National Insurance Tax Hike As 'Fair'

PM faces Tory disquiet.

09/03/2017 20:31 GMT
Yves Herman / Reuters
Theresa May attends the EU summit in Brussels.

Prime Minister Theresa May has insisted that the controversial Budget changes to National Insurance Contributions for self-employed workers will make the system “simpler, fairer and more progressive”.

The Government is facing a rebellion from its own MPs after Chancellor Philip Hammond announced the move yesterday amid fears it will punish entrepreneurship.

It also breaks a 2015 Conservative manifesto pledge not to increase National Insurance.

Speaking in Brussels, May defended the policy, and pointed to the independent think-tank, the Institute of Fiscal Studies, support for the change.

She said the decision “was taken in the context of a rapidly changing labour market in which the number of people in self employment is rising rapidly”.

May said the full effects of the reforms would be set out in a paper this summer, insisting the changes would make the system “fairer” and “more progressive”. 

“This is a change that leaves lower-paid self-employed workers better off, it’s accompanied by more rights and protections for self-employed workers,” she added.

Many Tories have been openly critical of the measure.

MP Stephen McPartland said the hike would “tax those families who have taken on the risk of setting up their own small business, many of which employ apprentices and are the backbone of our economy”. 

While former leader Iain Duncan Smith said the measure would hit “people who choose an enterprise process” and hoped it would be reviewed in the Autumn Budget.