Budget: National Insurance reform will be seen as ‘Rookie error’

Chancellor Philip Hammond.
Chancellor Philip Hammond.
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Former Conservative chancellor Lord Lamont has said that Philip Hammond’s much-criticised National Insurance reform will be seen as a “rookie error” within time.

The Tory peer warned Mr Hammond about breaking manifesto pledges and said he is “fortunate” that a General Election is not looming.

Lord Lamont’s comments came after Downing Street insisted the Prime Minister was “fully committed” to reforming National Insurance contributions (NICs) for the self-employed despite a backlash from within her party.

Theresa May said the 2 per cent hike, which will see 2.5 million self-employed people pay an extra £240 a year on average, is “fair”.

But, writing in The Daily Telegraph, Lord Lamont said: “Election pledges should not be lightly given... tax pledges cannot be lightly cast aside.

“My guess is that, in time, the Chancellor’s tax raid on the self-employed will be seen as a rookie error.

“He is fortunate in having plenty of time to regain trust on tax before the next election.”

Lord Lamont, who was John Major’s chancellor between 1990 and 1993, argued that the self-employed should have lower NICs rather than equal benefits.

“Doing otherwise goes against the entire grain of the Conservative policy since 1979,” he added.

Criticism for Mr Hammond’s £2 billion NICs plan, which was announced in his Budget on Wednesday, came from Tory backbenchers as well as normally Conservative-supporting newspapers.