What happened The Budget bust-up
In a dramatic and humiliating U-turn, the Chancellor, Philip Hammond, announced this week that he was dropping what had been a key plank of his Budget last week – a planned hike in National Insurance (NI) contributions. The rise had been billed as a move to bring tax rules for the self-employed in line with those for salaried workers ( see page 8), but it was immediately damned by many Tory MPS as a flagrant breach of the party’s manifesto commitment not to raise NI charges. Former chancellor Norman Lamont slammed the policy as going against “the entire grain of Conservative policy since 1979”. David Cameron was also drawn into the row when he was caught on camera saying: “Breaking a manifesto promise: how stupid can you get?”
The PM first sought to ride out the storm by promising to postpone the tax hike until autumn. That didn’t quieten the critics, so Hammond has now been obliged to dump it.
What the editorials said
Quite right too, said the Daily Mail. Hammond’s Budget was a “public relations disaster”. By hiking NI payments for the self-employed, he breached an explicit pledge that featured four times in his party’s 2015 manifesto. In doing so, he was attacking the very people the Tories are supposed to protect – the “hardworking, self-reliant, risk-taking” voters on whom this country must rely if it is to prosper in a post-brexit world. The suicidal nature of the plan was immediately apparent, said The Daily Telegraph. In a post-budget poll, almost half of those questioned said they’d be less likely to vote Conservative as a result of it, and only one in four say they still regard the Tories as a party of low taxation.
On the contrary, the Prime Minister should have stood firm, said The Economist. The proposed changes were fair and necessary, and would have inflicted only “minor pain” – £240 a year, on average – on a relatively small number (about 2.5 million) of tax payers. If Theresa May “flinches at the unjustified outrage” that this Budget has stirred, “it is hard to see her taking on bigger challenges”.