Philip Hammond delivered his first Budget as Chancellor last week and it’s fair to say that, whilst there were some good things included in it, it has also created some controversy. The previous week I had asked the Prime Minister at Prime Ministers Questions about business rates and would the Government look carefully at the impact on small firms, as I knew from discussions I'd had in the constituency that some were being hit by the new rate. Particularly hit were pubs, so I was pleased to see measures taken to mitigate the impact on companies who were being lifted out of the Small Business Rate Relief scheme. In addition the Chancellor also gave a discount to pubs also badly hit. Some may feel that pubs should not be given special treatment, but in rural areas like the High Peak the local pub is much more than just somewhere to go for a drink, they can be the centre and heart of the village in many ways.

Importantly there was more money announced for social care; £2 billion over the next three years with the first billion being made available in 2017/18. This is a significant amount of money especially when added to the precept being granted to Councils to add to their Council Tax for social care.

These were just two of the positives, however he also raised National Insurance Contributions for the self-employed. There are different classes of National Insurance Contributions (NIC's) and most people who are employed pay what's known as Class 1 contributions. However self-employed people pay what is known as a Class 4, which is a smaller amount, as self-employed people do not enjoy the same benefits as those who are employed.

The Chancellor announced that Class 4 contributions would rise by 1% from next April, then again by another 1% in April 2019 the following year. This change would benefit self-employed people earning less than £16,250 a year but cost those earning more than this amount.  His rational was with the introduction of the new state pension, since 2016 self-employed people now build up the same pension entitlement as employed people.  Whilst I can see his point of view, I am very concerned that this punishes those people who, as self-employed, forsake many of the advantages and security of employment, and very often are those with the entrepreneurial spirit to strike out in business on their own. I and other colleagues have made our concerns known, and I think it is possible that this may be re-visited before any legislation comes before the House in the autumn.

Get Involved