Thursday, 9 March 2017

The Tory student fees?

One of the few consolations of no longer picking up IT jobs on a self-employed basis is all the government paper-work. On the other hand, one keeps more of ones own income. Now even the advantage of lower NI contributions is to go as a result of yesterday's budget. This is a clear breach of the Conservative 2015 manifesto.

It may be that the writers of the Cameron promise made it out of ignorance of the world of work outside of employment by large organisations. Nor did they plan on UK leaving the EU. The Conservative Research Department wonks had clearly calculated that there was no need to increase NI contributions by employees and that any budget shortfall could be accommodated by further cuts in social services. They did not realise that they needed to put the qualifier "class 1" in front of the term "national insurance contributions" and did not foresee the accelerated growth of self-employment. The civil servants however did their homework as this media release shows.

Hammond's decision will be seen as a betrayal by sole traders, a sector in which the Conservatives have traditionally been strong. What he may not have factored in, which will probably come back to bite him, is that around 20% (and growing) of journalists are self-employed and thus are liable to pay Class 4 contributions. He will attract the same bad press as Nick Clegg did when he went back on his promise to vote against student fee rises.

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