Friday, 10 March 2017

Class 4 NICs - an unsatisfactory compromise

Guido Fawkes posits a fundamental disagreement about fiscal rectitude between the chancellor and his prime minister. Mrs May and her advisers appear to believe in the same magic money tree as Ed Balls and Gordon Brown did, while Phillip Hammond - who has experience of running a real-world company, rare among government ministers - is desperate for any measures to reduce the deficit.

The result is an unsatisfactory compromise. If the extra revenue is necessary now, and with Brexit looming it surely is, then the enabling clauses should be part of the Finance Bill, the regular budget legislation. (At least the tax is progressive.) Instead, it is being delayed. But that does not get over the main objection from back-bench Conservatives and the self-employed who feel they have been shafted over these extra contributions, that the Conservatives lied to them in their manifesto, because clearly the government is determined to go ahead with the legislation anyway.

Or perhaps this is a hint that Mrs May is preparing for a general election before the NIC legislation comes before the Commons in the autumn? A new manifesto would give a fresh mandate.

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