In this question Lord Bilimoria notes the reversal made by the Government to increasing National Insurance contributions for the self-employed is to avoid breaking a manifesto pledge. He states his belief as to why there was opposition to the increase and asks the minister if he agrees that that the main role of the Government is to promote growth of jobs and entrepreneurship. The response from Lord Young is also provided.
Class 4 National Insurance Contributions
15 March 2017
Statement made by Lord Young:
Lord Young repeated the Statement made in the House of Commons by the Chancellor of the Exchequer, the right honourable Philip Hammond, on national insurance contributions paid by the self-employed.
Would the Minister agree that, while I welcome the fact that the Government have backed down on this, the reason given very clearly is on the spirit of a manifesto commitment not being broken? Well, the biggest manifesto commitment that has been broken is remaining in the single market. Are the Government now going to back-track on that? We shall wait and see.
The main reason why people—and when I say people I mean Members cross party in another place and here—objected to this increase in national insurance contributions for self-employed people affecting more than 2.5 million people is because the perception that it sends out is that the Government are going after and hitting the very people who take the risk to be self-employed and going against encouraging entrepreneurship. Would the Minister agree that the main role of government in this area is to encourage entrepreneurship, which means encouraging job creation, tax takes and growth, which will help to get rid of the deficit—not by hurting the very people who will create that growth?
The noble Lord will know that we have taken a number of measures to promote enterprise. We have reduced corporation tax and we are investing in infrastructure and broadband. I do not want to reopen a discussion that we have had for the last two or three weeks about the single market and Brexit, but what has happened is that there was an announcement last week and there were then discussions with parliamentary colleagues and others. Against the background of those discussions, the Government have decided not to proceed. This is not an unparalleled development in the political system. It is a measured and proportionate response to some very real reactions that we got from colleagues down the other end.