Budgets over the last few years have very quickly unravelled, and this one is no different. We all remember the Pasty Tax, the Tax Credits cuts, cuts to Personal Independence Payments and now increases in National Insurance contributions.
Last week after Philip Hammond’s drab & expensive budget there was outcry from Labour, from business and from the self-employed who would be affected. We all recognised that the announcement made amounted to a broken manifesto promise, an attack on entrepreneurship and a hit on low-earners who are trying to go it alone.
There was real concern for me as MP for Blackburn. I know that there are over 8,000 self-employed people in Blackburn and that some will be barely keeping their heads above water, and Hammond’s broken promise only added to the uncertainty they faced.
Despite Labour protests about the unfairness of this hike in NI contributions for the self-employed, the Prime Minister said last week that rises in self-employed National Insurance contributions were ‘fair’. If that is the case, why has she ordered the Chancellor to reverse them?
I welcome the U-turn, but am left with concerns about the competence of those occupying Numbers 10 & 11 Downing Street. Faced with opposition from Labour and Tory rebels, they folded in under a week. Their action have shown that a Tory budget is about as reliable as a Tory manifesto promise, and they now have a £2bn black hole in their budget projections.
Yesterday, Tory MP Sir Desmond Swayne said that an article he had written defending the rise was at the printers. Never has an edition of the Forest Journal been so highly anticipated in Westminster. Another Tory, Rory Stewart, had to segue on live TV from defending the rise to defending the U-turn. Ed Vaizey, former Culture Minister, tweeted after hearing the news ‘Blimey, I’ve been vigorously defending it…’.
You almost feel sorry for the Tory MPs trooped into TV studios to spin a broken manifesto promise. This screeching U-turn has humiliated many Tory MPs and I am certain will not be soon forgotten.
They must make up the shortfall from somewhere, but where?
A slight positive from the budget last week was the commitment to an additional £2 billion in funding for social care. Even before the U-turn, this wasn’t enough. The government proposed to give social care £2bn over 3 years, with £1bn available this year. Social care needs £2bn this year just to stabilise the market. It needs £2.6bn by 2020. What Hammond proposed simply was not enough to end the crisis in social care.
As the government refuse to invest properly in social care, Hammond must guarantee that the black hole his own dishonesty has opened up in his budget must not come from social care. As a shadow minister, I will continue to push for greater funding for social care and a strategic, long term plan to rescue the sector from Conservative cuts and neglect.
He must also ensure that making up the shortfall do not result in cuts to teachers, police officers, nurses or doctors, and rule out imposing any further measures that will hit the poorest hardest.