Chancellor Philip Hammond, who announced last week’s Spring Budget 2017, which included a rise in National Insurance Contributions (NICs) for self-employed workers, has scrapped the increase for self-employed workers.

The decision to drop the changes to NICs came in a letter from Hammond to Conservative MP Andrew Tyrie, chair of the Treasury select committee. It also came after a delay the day after caused by a backlash within the Tory party and severe criticism from the Labour opposition.

According to the Guardian, MPs insisted May had ordered Hammond to drop the plans, fearing that breaking the party’s manifesto pledge to make “no increases in VAT, national insurance contributions or income tax”, would do too much damage to the Conservatives’ reputation.

“It was initially amazing to see the Conservative Government, the party for small business and entrepreneurs, break a manifesto pledge so perhaps not so surprising to see this U-Turn after the significant backlash,” Dave Chaplin is CEO and founder of Contractor Calculator, said. “While many people choose to take the risk and be self-employed there are still those in false self-employment and the Government needs to focus on clamping down on firms that force vulnerable workers into low paid self-employment due to the inequality of bargaining power they have as workers.”

Doug Monro, co-founder of Adzuna, also commented, "The Spring Budget 2017 brought good news for the jobs market, fell in the National Apprenticeship Week and focused on clearing the path for 16-19 year olds into work and T-Levels, as well as increased support for 'return ships' for those going back into work. However, for the self- employed, the boat was temporarily rocked, following the news of a National Insurance Increase. Phillip Hammond's plan to make the UK the most attractive place to work and grow a business would have initially introduced a tax hike that would make the gap between the employed and self-employed fairer.

 "Naturally, that left a sour taste in the mouths of many self-employed workers but, once plans were scrapped, it has lifted the short-lived doom and gloom. The change of heart means avoiding the risk of crushing the entrepreneurial spirit Britain proudly displays. As such a hike could deter from future generations following their dreams and owning their own businesses,” Monro said.  

"Self-employment has recently taken on new life, with the rise of the gig economy prompting new legislative rights for those such as Uber drivers to receive the National Minimum Wage and holiday pay. Now that the kerfuffle has been resolved, Britain can continue to evolve its proud history of self-starters and innovation," Monro said.