This article is more than 3 years old

This article is more than 3 years old

Theresa May’s decision to delay a controversial national insurance rise for self-employed people appears to have partially quelled a rebellion by Conservative MPs, although Labour said ministers were “in disarray” over the issue.



Downing Street insisted on Friday that there would be no watering down of the proposal, while indicating it would be introduced alongside improved benefits for the self-employed.

May was fully committed to the headline measure in Philip Hammond’s first budget, her spokesman said, adding that the chancellor and other ministers would be talking to MPs and businesses over the summer.

Before the autumn the government would produce a paper setting out the national insurance changes, which will bring self-employed contributions into line with those paid by employed people. It would also look “potentially at what new rights could be given to people who are self-employed”.

Asked if this meant the measures outlined by Hammond on Wednesday would remain, he said: “The prime minister was clear last night – we are bringing forwards legislation in the autumn in reference to the national insurance announcements that were made in the budget.”

May had announced the delay on Thursday evening, after the number of Conservative MPs opposing the scheme climbed above the government’s working majority, amid pressure growing on the chancellor.

Some Tory rebels had worried the proposal could be introduced as part of the current finance bill even though it does not come into force until April 2018.



The shameless Tories have betrayed the self-employed – and themselves | John Harris Read more

But the prime minister said on Thursday evening that the changes would be legislated on in the autumn, when Hammond presented the second budget of the year.

“It won’t be part of the finance bill,” May told reporters at a European summit in Brussels. “That is always what happens with national insurance changes. Those elements will be brought forward in the autumn.”

The delay will allow the government to publish a paper making the case for the changes; and will come after the publication of Matthew Taylor’s report on the changing nature of the labour market, which will consider the gig economy and self-employment.

May defended the policy, saying it would make the tax system “simpler, fairer and more progressive”, and insisting it did not breach the Conservative manifesto pledge not to raise national insurance.

The delay could be seen as something of an implied rebuke for Hammond.

However, sources close to the chancellor insisted he was relaxed about the way that his budget had been received, saying he was not interested in climbing the political ladder, and was only motivated by making the tax system fairer.



The partial climbdown was welcomed by some of the rebels. Ann-Marie Trevelyan, the Tory MP for Berwick-upon-Tweed, said the comments were reassuring. “It will provide a rounded perspective and everyone will have the chance to consider the impacts.”



How the Conservatives pledged no rise in national insurance, then raised it Read more

Tom Tugendhat, the MP for Tonbridge and Malling, who had asked Hammond to rethink the idea, told BBC Radio 4’s Today programme he believed May was right to wait for and consider the Taylor report. “The policy has got to reflect the individual risk that entrepreneurs and self-employed people bear … The policy has got to reflect the reality of modern employment.”

It remains to be seen, however, whether some rebels might still object to the planned changes, which will take national insurance contributions for the self-employed to 10% in 2018 and 11% in 2019.

Guto Bebb, the junior Wales Office minister who is also a whip, told BBC Radio Cymru: “I believe we should apologise. I will apologise to every voter in Wales that read the Conservative manifesto in the 2015 election.”

A Guardian tally of Conservative MPs known to have publicly or privately expressed opposition to the proposal before May’s announcement found 18 could potentially oppose it. The government has a working majority of 17.

Those expressing private disquiet were understood to include a cabinet minister.

The shadow chancellor, John McDonnell, said May’s comments showed she and Hammond were at odds over the issue.

“The fact the prime minister won’t fully support her own chancellor’s budget measure, and has been forced by Labour to row back on it just 24 hours after he delivered his speech in parliament, shows the level of disarray that exists at the top of government.”

The Liberal Democrat leader, Tim Farron, said: “Kicking the can down the road for a few weeks shows that the Conservatives are still planning to hit hard-working self-employed people.”.