Philip Hammond’s Embarrassing U-Turn on National Insurance

I don’t know if I’ve ever seen a budget unravel quite so quickly in all my years of following politics. Not even the shambolic 2012 budget from George Osbourne had its tax raising feature dropped within the first week. The decision to abandon his plans to raise National Insurance Contributions (NICs) paid by the self-employed is quite frankly nothing but a huge embarrassment for Chancellor of the Exchequer Philip Hammond, not to mention for the government as a whole.

But this goes well beyond mere embarrassment. At such a crucial junction in the country’s history this issue raises some serious questions about the political judgement of the administration’s key decision-makers. For one thing this entire fiasco portrays a naivete and incompetence that will no doubt harm our forthcoming negotiations over Brexit, negotiations that are integral to the future prosperity of this country. Indeed it was quite startling to see a complete omission of Brexit from the budget, as if the Chancellor has no plans for its inevitable ramifications, worrying to say the least.

What’s also disturbing is that during all the planning, discussions, and meetings that go into a Budget it was never pointed out that Hammond would be breaching a commitment made in the manifesto on which the party campaigned less than two years ago.

However bad this tax rise was in undermining their supporters trust in politicians and the government, it was also profoundly un-Tory. This tax-increasing policy quickly set off alarm bells amongst conservatives throughout the country and resulted in a barrage of questions for the Chancellor.

In this age of modern communications Mr Hammond hadn’t even sat back down from the podium before a number of Tory MPs were being contacted by angry self-employed constituents. Dozens of normally loyal backbenchers quickly began to criticise the Budget before the last words were even out of the Chancellor’s mouth.

Of course credit does have to go to Hammond for recognising his mistake and shutting down the source of public dissatisfaction. But at the same time standing by your decision, fighting for it and debating with your opponent’s counts for a lot more than simply rolling over. For one thing the NIC increase was being delayed until the November Budget, by which point he would have had access to a report on self-employed tax and would have been able to make his position and decision much clearer, maybe then it would have made some semblance of sense.

What’s unusual about this U-turn though is the timing of it, the political agenda had moved on from this budget, with the continued discussions about Brexit, and the announcement by Sturgeon of another Scottish referendum the political eye had moved on from NIC increase. So why did Hammond decide to backtrack on his own Budget?

Well to be honest it wasn’t his call, ultimately it came from No 10, clearly they believed the anger and hostility from self-employed voters, and the numerous angry tabloid campaign, would only fester and grow unless the policy was killed off entirely. So at the end of the day it was Theresa May who forced Hammond to subject himself to a political embarrassment the likes of which his credibility is unlikely to ever fully recover from.

Now I can’t say that Theresa May hung Hammond out to dry and used him as a scapegoat, not entirely anyway, she did bare her share of the responsibility for the Budget breaking the ‘spirit’ of her parties manifesto. She would also of course have to defend the U-turn announcement at Prime Ministers questions just a few hours later. That should have been a difficult half an hour of questioning for the PM but it actually turned out to be bearable for as Jeremy Corbyn put in an abysmal performance even by his own low standards.

Labours response to the Budget actually managed to give May a victory at a time when she should have been suffering a barrage of Labour ridicule. Labour believe the answer to the fiscal shortfall is to borrow more on top of the £1.7 trillion national debt.

Despite Labours impotency though this U-turn has damaged the government with what can only be described as a self-inflicted wound. While Britain suffers two years of tough Brexit negotiations the entire country needs a Cabinet that’s on top form, not shooting itself in the foot.

And we need a Prime Minister that will back up and fight alongside her ministers. Theresa May knew about the NIC policy, and of course she will have approved it, there is no way the announcement was a surprise for her. So why did she force Hammond to backtrack, to humiliate himself? Why did she not stand up to the critics and give her Chancellor the support he needed? Whatever her reason May has done little but show herself with little backbone to support her Cabinet when faced with vehement criticism. In the Home Office May may have gotten away with this cursory treatment of colleagues, but in No 10 she needs to back them up to the hilt, especially if she gave their policies the go ahead.

Jamie Hall

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