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Hammond’s National Insurance Nightmare

Chancellor Phillip Hammond

George Osborne may have been the worst chancellor of modern times, but he understood one thing. Subordinating the national interest, i.e. those of British business-in-general to the narrow concerns of the Conservative Party, allowed for good press and the accumulation of political capital. It didn’t matter if these actions weakened the economy or made life worse for millions just as long as it helped secure the next election, which it duly did. “Call me” Philip Hammond, is a very different kind of chancellor. As he got up at yesterday’s budget statement, he entertained the chamber with a handful of zingers at Labour and the SNP’s expense, but effectively he did the anti-Osborne. His was a thin, technocratic position that didn’t pay too close an attention to politics, and as a result the politics played him.

First and foremost was floundering into a trap of the Tory Party’s own making. You may recall the weird campaign they ran in the run up to the general election: a promise to spray paint public services with money, while emphasising prudence and responsible spending that channnelled circa 1996 Gordon Brown. At the time, Dave and Osborne made a big show of accusing Labour of wanting to quietly raise National Insurance (or the jobs tax as they opportunistically dubbed it), and this forced the sainted Ed to publicly forswear any such thing. Meanwhile, they ensured it appeared no less than four times in their manifesto. And now, the Tories have gone and broken it. Hammond has tried saying that the pledge only meant a certain kind of NI contribution. More fool the Tory electorate for missing the caveat at the time, eh? And so it presents as a straight pledge break, which is something no politician should be seen to do.

And then it’s who is affected. It’s a smash and grab on the petit bourgeoisie, of the army of small business people and self-employed whose ranks swelled after the crash hit, redundancies were handed out and secure job opportunities shrivelled up. Traditionally the backbone of centre right parties everywhere, it’s as if Hammond failed to make the political calculations as he was adding up the sums. Or perhaps he did, thinking it unlikely they’d pass over to Labour amidst its current travails. Which might be true, but there are other options for narked off Tory voters. From a press reception point of view, it was never going to go down well with the perennially terrified readers of The Daily Mail anyway. But neither did he latch on to the position of freelance hacks and those associated with right wing titles in a self-employed capacity: many a columnist would have to cough up. Bearing in mind Osborne delivered budgets much worse then Hammond, and much more damaging too, it’s amusing to see the Tories hit with a wall of negative coverage.

Then why do it? The Conservatives are galloping ahead in the polls, May is retaining a favourable approval rating, and for the most part the media remain entirely fixated on Jeremy Corbyn and how many times he blew his nose today. An unnecessary own goal? Perhaps. From a technical-fiddly point of view of raising extra monies, it does have the virtue of bring National Insurance in line with PAYE and making the system fairer, as Hammond puts it. And, while it would be news to most wage and salary earners that self-employed people have enjoyed reduced contributions rates, now they do know about it the Tories are going to have to bank on them thinking it’s fair too. A bit of a gamble to be sure, but if this is “necessary” then now is the time to do it.

This morning, Nick Robinson referred to Hammond as “Spreadshit Phil”. Perhaps it wasn’t entirely a slip.

2 Comments

  1. Bazza says:

    Yes as Labour List said in a good line – “Hammond got his NICs in a twist.”.
    Interesting re Brexit and looking at departmental cuts from this budget, they included international trade and industrial strategy – perhaps a BIGGER TORY OWN GOAL!

  2. Bazza says:

    Ha!Ha! Stop Press – Tories drop NIC plans!
    Theresa May or Theresa May Not!
    One own goal gone so also after budget plans to cut the departmental budget for international trade and Industrial Strategy (as we approach Brexit!) from £2b to £1.7b can we now expect the £300m now to be found?
    A Labour Victory I think!

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