Wednesday, 29 March 2017

Not another broken promise?

Since Chancellor of the Exchequer Philip Hammond’s budget statement, nearly all the media reporting and comment has been about just one aspect of his announcements: changes to National Insurance for the self-employed.

Hammond and May’s perception of weak opposition has clearly made them and their advisers act complacently. It’s no surprise that Conservative internal tensions have been exposed.

Conservative opponents of Hammond’s proposals have focused their arguments in two ways.

First, they say that the proposal breaks an explicit Conservative 2015 Manifesto pledge. Well, of course that’s true, but I didn’t hear these same MPs jumping up and down with rage over the last eight years as Conservative-led governments broke promise after promise…on the NHS, on housing, on SureStart, on school budget…there is an almost endless list of broken pledges.

Second, they have argued, ideologically, that self-employment is close to the Conservative spirit, and that self-employment nurtures the entrepreneurial spirit which should be encouraged.

Of course, the entrepreneurial spirit should be encouraged, but that’s not a good reason for giving huge tax- and national insurance subsidies to wealthy and very high-paid individuals and to companies which abuse self-employment and zero hours’ contracts to conduct unfair competition with companies who play fair.

I welcome the review, led by Matthew Taylor, into the implications of new forms of work on worker rights and responsibilities, and on employer freedoms and obligations.

Nearly 1 in 6 of those working in the UK are now self-employed. There has been a big rise in short-term, casual, allegedly temporary work. There has also been an explosion of ‘disruptive’ businesses, where new ways of working and technology come together to create new products and services. Just consider the rise in internet shopping and its impact on the High Street and traffic congestion, let alone on working practices and arrangements.

The issue of tax cannot be isolated from the wider problems faced by self-employed people, including bogus self-employment and the overall impact on the economy and on communities and families. For example, the rise in self-employment and zero hours contracts has made it far more difficult – and expensive – for young people wanting to buy a home to satisfy building societies about their financial credibility.

The vast majority of people want to see fairness in employment rights and responsibilities and fairness in contribution arrangements in return for pension, health and other benefits. I support that.