Philip Hammond is a politician who knows a thing or two about reinventions. After all, this is the man who spent his teenage years in Essex as a well-liked, long-haired organiser of glam rock parties, decades before he acquired the nickname ‘Spreadsheet Phil’ and the somewhat unfair reputation for being a dull numbers man. Likewise, for years he was considered a dependable right-winger with stridently eurosceptic views, announcing in 2014 that he supported leaving the EU under the existing arrangements, yet his two years as Foreign Secretary saw him ‘go native’ and become one of the most outspoken Remainers in the Cabinet. Now, after undergoing several personal reinventions he is seeking to reinvent Conservative economic policy, using last week’s Budget to increase National Insurance for the self-employed. There’s only one problem – David Cameron made a cast-iron pledge during the 2015 election campaign not to raise VAT, National Insurance or income tax.
Of course David Cameron is no longer Prime Minister, but the Conservative manifesto that he stood on still serves as the de facto policy platform of the current government. Millions of voters backed the Tories in 2015 in the belief that they would not introduce any tax rises, and as such last week’s Budget is a catastrophic u-turn reminiscent of George HW Bush’s infamous ‘no new taxes’ promise. The Conservatives have always had the reputation of being the low tax party, and under Theresa May they have wisely appealed to working-class voters by promising ‘a country that works for everyone,’ yet by increasing National Insurance they risk undoing this good work and alienating traditional Tory voters.
New polls suggest that Hammond’s Budget has blown the Tories’ reputation on taxes, with just 25% of voters now regarding the Tories as a low tax party. Additionally, 46% state that the Budget has made them less likely to vote Conservative in a future general election, a sign that Theresa May’s long-lasting honeymoon since taking over as Prime Minister has finally come to an end. Increasing National Insurance can’t even be described as a move which is unpopular but necessary; instead it is deeply unfair and regressive, hitting those who are bold enough to step into the unknown and set up their own business. Yes, self-employed workers currently pay less National Insurance, but they also don’t enjoy perks such as sick pay or maternity leave, meaning that they are not on a level playing-field with those in employment. These new increases punish entrepreneurship and enterprise, two values which should be at the core of any Conservative government, and they will damage the party’s reputation amongst the very same voters that Prime Minister May has been targeting.
Hammond’s Budget wasn’t all bad, and by providing extra funding for new grammar schools and free schools it proved that education reform based around the principle of expanding school choice remains at the heart of Theresa May’s domestic agenda, a welcome announcement that builds upon the progress of the past decade. However, the National Insurance increases have inevitably overshadowed the rest of the Budget, and pressure is building on the Chancellor to reverse his decision. Unfortunately, little real opposition has been provided by the party of Opposition, with Jeremy Corbyn’s Labour seeming unconcerned about tackling the government on this issue.
At a time when the country needs an Opposition to lead the charge against an unfair tax increase, Shadow Chancellor John McDonnell seems to be focusing most of his energies on accusing party moderates of plotting a ‘soft coup’ against Corbyn’s leadership. The main backlash against the Budget has therefore come not from Labour but from the Tory-supporting Sun newspaper, which has launched a campaign against Hammond’s ‘White Van Scam.’ They have been joined by newspapers across the political spectrum, both tabloids and broadsheets, with the Telegraph stating that ‘it is hard to remember a Budget that has been so panned by so many’ whilst accusing the Chancellor of abandoning conservatism in favour of ‘an outdated, Brownite approach to tax.’ If the government does back down it will be because of pressure from the print media, not the Labour Party.
This entire shambolic episode serves as a good reminder of why a strong Opposition is so vital to our democracy. Governments of all parties make mistakes, and when the Opposition is weak they will inevitably become complacent and sloppy. Philip Hammond demonstrated such complacency last week, and the result could be highly damaging for the Tories at the next general election. Whilst Corbyn’s Labour Party does not look capable of capitalising on the Chancellor’s mistakes, a more competent and electorally appealing leader could, and Hammond has therefore left a huge open goal for any future Labour leader seeking to undermine the Tories’ economic credibility. Increasing National Insurance for the self-employed is unfair and unnecessary, an indefensible broken promise which goes against conservative principles and hits the government’s electoral base hard; the Tories should never give up their low tax mantle, and that is why this decision must be reversed.