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Theresa May Insists The Government Will Still Increase Tax For The Self-Employed

The government has been criticised for breaking its manifesto promise not to increase national insurance for some workers – but Theresa May isn't backing down.

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Theresa May has insisted the government will push ahead with plans to increase the tax paid by self-employed workers – although she suggested extra state benefits could be introduced to soften the financial blow.

The prime minister said the decision to raise national insurance rates for the minority of workers who do not work for a single employer was "fair", despite facing a growing rebellion among Conservative MPs over the decision to break a manifesto pledge not to increase taxes.

May told reporters at a European Council meeting in Brussels that the move, announced in Wednesday's Budget, would help raise "revenue to pay for skills, schools, and social care" because the growing number of self-employed workers meant the government was receiving less tax income.

"I think it is fair to close the gap in contributions between two people doing the same work and using the same public services," she said.

However, the prime minister hinted that the legislation required to make the change would be delayed until late this year, potentially allowing her to head off a rebellion within her own party. She also suggested the government could announce a series of additional benefits for the self-employed, such as strengthened parental rights, before bringing the legislation to the House of Commons.

"This is a change that leaves lower-paid self-employed workers better off and is accompanied by more rights and protections for self-employed workers," she said.

The tax rise will cost millions of workers an average of £240 a year, which Labour compared negatively to the plans to cut corporation taxes for businesses.

Earlier on Thursday the tax rise appeared to be in doubt as more and more Tory MPs broke ranks to criticise the move.

The chancellor Philip Hammond was forced to defend the policy in a series of TV and radio interviews. The increase, which will cost 2.5 million self-employed people an average £240 a year, was fair, he said.

But the rumbling on the Conservative back benches continued to grow, with MPs including Iain Duncan Smith, Dominic Raab, and Anne-Marie Trevelyan expressing doubts about the plan.

On Thursday morning Theresa May's official spokesman repeatedly refused to say if the policy was being reconsidered.

Asked whether the government will reverse plans for the 2% increase the spokesman said: "This has been set out to address an area of unfairness, and, you know, it does that."

Four times he was asked if the government will back down after an angry reaction from the Conservative back benches and right-wing newspapers, and four times the spokesman ducked the question.

He also refused to answer questions about whether voters should feel betrayed that the government had broken the pledge in its manifesto.

"The point of this Budget was to restore fairness in a system where it no longer existed," by reducing the disparity between the national insurance paid by employees and the self-employed, the spokesman said.

"The vast majority of people will gain from these changes."

Thursday's newspaper headlines also made grim reading for the Treasury, with the breach of the manifesto promise dominating the coverage of Hammond's first Budget.

Tomorrow's front page: Chancellor sparks national wave of fury by unleashing tax raid on Britain's self-employed

However, in a boost for the chancellor, the Institute for Fiscal Studies said the change was "modest but welcome".

The increase was a breach of the manifesto pledge, but would help to address a discrepancy in the tax system that resulted in an "unequal playing field between the self employed and employees," IFS director Paul Johnson said.

The Conservatives had tied their hands "to an absurd extent" by making the "silly pledge" not to increase taxes before the election, Johnson added. "No party should repeat these sorts of promises."

Alex Spence is a senior political correspondent for BuzzFeed News and is based in London.

Contact Alex Spence at alex.spence@buzzfeed.com.

Jim Waterson is a politics editor for BuzzFeed News and is based in London.

Contact Jim Waterson at jim.waterson@buzzfeed.com.

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