Delay to NICs increase a ‘partial U-turn’, says McDonnell

Norwood chief executive Elaine Kerr said that while the extra money was welcome, “the Chancellor has not indicated how the Government intends to close the substantial budget deficit the sector faces in the long-term”.

“New infrastructure spending on schools and housing is a welcome contribution to local economies, with many small businesses such as plumbers, electricians and decorators as well as those in construction reaping benefits”.

The prime minister insisted the rises were necessary and fair but said the chancellor would listen to concerns.

In his spring Budget, Hammond acknowledged the revaluation “has undoubtedly raised some hard cases” of small firms that would see a dramatic increase in bills from next month.

Delivering his first Spring Budget announcement on Wednesday, Chancellor Philip Hammond said that while the government expected the overall level of gross domestic product (GDP) for the United Kingdom between now and 2021 to reach broadly the same level as that forecast during last November’s Autumn Statement, growth would likely take a different route than what was previously expected.

In his first Budget, he said that, alongside the additional funding, Health Secretary Jeremy Hunt and Communities Secretary Sajid Javid will announce measures to identify and support councils which are “struggling” and to ensure more “joined-up working” with the NHS.

Among the expected budget changes include the closing of loopholes that allow many self-employed workers to pay less tax, however it is also expected that their worker rights should improve.

Meanwhile, Hammond has faced a backlash after announcing a hike in taxes for self-employed people, breaking a key Conservative Party manifesto pledge. I will apologise to every voter in Wales that read the Conservative manifesto in the 2015 election’.

Hammond said that a self-employed person now paid significantly less in national insurance contributions than an employee on the same wage, a difference he said was “no longer justified”.

The rise in people in self-employment risked eroding the tax base, leaving public services short of funding, she warned.

Calling for the government to abandon the plans to increase NICs, McDonnell said that the prime minister should “simply show some leadership, rather than this partial U-turn”.

The budget also included a cut in the tax-free allowance for dividends, which will largely affect the self-employed.

Overall, this year’s budget was disappointing for the UK’s self-employed and freelancers.

Referring to the Tory victory in the Copeland by-election, he said: “We are the Government of the NHS”.