A mess that should have been avoided

PHILIP Hammond performed a handbrake turn yesterday with a screech that would have impressed the stunts co-ordinator on the Dukes of Hazzard.

Just before Theresa May was about to enter the Commons chamber for Prime Minister’s Questions a letter to Conservative MPs became public in which he announced that the increase in National Insurance contributions for the self-employed he had unveiled in the previous week’s Budget would now not be implemented.

Any citizen who took the time to read the 2015 Conservative manifesto would have concluded that National Insurance increases were not on the cards for anybody. The argument was put forward that the tax lock only applied to employer and employee contributions, but Mr Hammond yesterday admitted “it is clear that compliance with the ‘legislative’ test of the manifesto commitment is not adequate”.

He added: “It is very important both to me and the Prime Minister that we are compliant not just with the letter, but also the spirit, of the commitment that we made... There will be no increases in NICs rates in this parliament.”

The Government should never have got into this mess. It begs the question as to whether Downing St and the Treasury had forgotten about this key item in the manifesto that was put to voters less than two years ago.

Many Conservative MPs who have spent the past week defending the change to irate sole traders will feel a mixture of relief, embarrassment and annoyance at the U-turn. An exception is Guto Bebb, the Aberconwy Wales Office minister with a reputation for straight talking, who is likely to feel vindicated. He had suggested an apology was owed to Welsh voters who had read the manifesto. His contribution to the debate is unlikely to have boosted his popularity in some sections of Whitehall but he expressed in public sentiments that were doubtless shared by many of his colleagues.

One of the more perceptive responses to the controversy came from Conservative MP for Carmarthen West and South Pembrokeshire Simon Hart. He argued it was a “mistake” to “put this kind of stuff in the manifesto in the first place because things change”.

The manifesto was written when the political establishment expected the UK would stay in the EU – there was no certainty that the Tories would win a majority and hold a referendum – and it seemed likely that the recovery from the crash would continue.

But now the Chancellor faces the challenge of eliminating the deficit and protecting growth as the country negotiates its departure from the 28-member trading block. If he cannot increase income tax, VAT and National Insurance, what taxraising options does he have?

After so many years of austerity, what potential is there to still find savings in government departments? And will the NHS and social services survive without the unlocking of new investment?

Manifestos that shut down the options for a government are handcuffs. The Western Mail newspaper is published by Media Wales a subsidiary company of Trinity Mirror PLC, which is a member of IPSO, the Independent Press Standards Organisation. The entire contents of The Western Mail are the copyright of Media Wales Ltd. It is an offence to copy any of its contents in any way without the company’s permission. If you require a licence to copy parts of it in any way or form, write to the Head of Finance at Six Park Street. The recycled paper content of UK newspapers in 2014 was 78.5%