LONDON — The Chancellor Philip Hammond has broken a key Conservative party pledge not to raise National Insurance contributions.

The party's 2015 manifesto promised that there would be "no increases in... National Insurance contributions"

However, the chancellor confirmed today that self-employed people will in fact be hit by a new national insurance hike.

Self-employed Class 4 contributions will now rise from 9% to 10% in 2018, and then to 11% in 2019.

The changes will hit 2.84 million people who will on average be £240 a year worse off.

Hammond insisted that the current situation, which sees self-employed workers pay lower national insurance rates, “undermines the fairness of our tax system".

"The employed and the self-employed use public services in the same way but the lower National Insurance contributions from the self-employed will cost the public £5bn this year alone," he told MPs.

"This is not fair to employees."

A tax on hard work

The government's opponents accused them of hitting "Britain's hardest working people".

"This is a tax on builders, taxi drivers and window cleaners, some of Britain’s hardest working people," Liberal Democrat Shadow Chancellor Susan Kramer said.

"This hits the gig economy where people are already insecure and facing rising prices and job uncertainty. And on International Women’s Day it will hit over one and a half million women.



"Companies will continue to save money by using workers without giving them the security and benefits of staff jobs. Meanwhile, these workers will have to pay more. This is patently as unfair as it is a tax on entrepreneurship and hard work."

Labour accused the government of putting extra burdens on the self-employed, without offering them anything extra in return.

"We have long argued for a clampdown on bogus self-employment but today the Chancellor seems to have put the burden on self-employed workers instead," Labour leader Jeremy Corbyn said.

"There has to be a something for something deal, so I hope the Chancellor will bring forward extra social security in return. One policy that Labour backs is extending statutory maternity pay to self-employed women which is likely to cost just £10 million per year."

Asked about the broken promise a Treasury spokesman told Business Insider: "This government has kept its manifesto promises."

In a bizarre defense of the policy, they pointed to the NICs Act legislation passed after the election. This legislation only set out plans to freeze class 1 National Insurance contributions, but does not mention plans to raise Class 4 NICs.

"The legislation set out the detail of the pledge," a Treasury source insisted.

However, a speech delivered by the then prime minister David Cameron repeated the pledge some months after the legislation was passed.

"We said in our manifesto we would not raise VAT, National Insurance or income tax for the next five years and that became the law of the land," Cameron said.