It looks like the embarrassing NICs debacle in the Spring Budget isn’t the only somersault the Chancellor has done on self-employment. It appears the strong and stable Chancellor has actually been backflipping on the subject for over a decade. In truth Mr Hammond has performed more somersaults than the entire UK athletics team!
Despite waging a war on the self-employed for the last year – with everything from new dividends taxes to punishing changes to IR35 in the public sector – before that, it seems the Chancellor was almost sympathetic to the burgeoning self-employed sector.
In 2001, for example, Hammond was singing a very different tune, telling a Westminster Hall debate: “We need to focus on the flexibility that microbusinesses and small businesses deliver because they provide a unique adjustment factor in the economy. One reason why the Government’s IR35 initiative has been so damaging and destructive is the fact that it has hit at the most flexible part of the economy.”
So where did the big key change come from? As he rightly said back in 2001, the flexibility of small businesses and the self-employed is a major advantage for our economy. And it’s not just flexibility: the self-employed are one of the UK’s most productive sectors, contributing over £255bn a year to the economy. So surely the last thing we want to do now, just before we drift into the uncharted waters of post-Brexit Britain, is stifle this vital part of our economy.
By pushing those punishing changes to IR35 into the public sector, Hammond has already driven huge numbers of contractors out and caused widespread disruption. The BMA have called it a ‘disaster for the NHS’, and it’s seriously damaged our flexible labour market. So the question now is: why are there reports he’s going to use the Autumn Budget to extend these disastrous changes to the private sector? Someone should remind the Chancellor before it’s too late about the danger of somersaults; one slip and you can fall flat on your face.
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