Delay to NICs increase a ‘partial U-turn’, says McDonnell

Theresa May’s announcement that voting on the increase in national insurance contributions (NICs) for the self-employed would take place in the autumn has been criticised by shadow chancellor John McDonnell as a “partial U-turn”.

In the Spring Budget delivered on 8 March, chancellor Philip Hammond announced an increase in Class 4 NICs to 10% in 2018 and to 11% in 2019, up from the current rate of 9%.

At a press conference at the EU Summit in Brussels, the prime minister said that legislation on the NICs changes would be brought forward in the autumn. May said that it would follow publication in the summer of a paper explaining “the full effects of the changes to Class 2 and Class 4”, as well as setting out wider changes relating to the protection of self-employed workers.

Calling for the government to abandon the plans to increase NICs, McDonnell said that the prime minister should “simply show some leadership, rather than this partial U-turn”.

“Labour have been clear from the moment they were announced that we will oppose these tax rises on low and middle earners, as we don’t think it is a laughing matter, unlike Theresa May and Philip Hammond,” said McDonnell.

He added: “What is even more alarming is that the government didn’t stop and think before announcing such a tax hike. It should have been obvious that they would need to consult first, or at least wait until after their review on self-employment had finish, before announcing such drastic changes.

“As a result millions of ordinary working families will have been made to worry, and will now be holding their breath until the government makes up their mind.”