Douglas Carswell

16 MAR 2017

Forcing U-turns is Parliament's job

Pundits see the government's decision to scrap its planned rise in NI contributions for the self-employed as the Chancellor's failure. Perhaps it should just be seen as Parliament doing its job.

Politicos have become so used to budgets being nodded through by MPs that they have come to believe Parliament is supposed to work like this. But it's not.

Prior to the 1930s, backbench MPs could table amendments to the budget resolutions. The national government changed the rules to prevent it. Since then, Parliament has tended just to rubber stamp hundreds of billions of pounds' worth of spending and taxation.

Yet opposition from MPs has now forced a volte face on the centrepiece of the budget after only a week. Perhaps Parliament isn't quite so powerless after all.

It will be interesting to see how the Chancellor now replaces the ditched measures.

In autumn 2015, George Osborne backtracked over tax-credit reductions without replacing them with alternative cuts. Instead, he conjured up an extra £27 billion from nowhere – based on conveniently revised borrowing projections. In effect, he simply borrowed more money.

By contrast, Hammond has hinted at a broader rethink of the treatment of the self-employed in the tax system – so as to achieve the same ends by different means. That suggests self-employed people shouldn't celebrate just yet. Alternative tax rises may be coming in the autumn.

That's the wrong approach. Rather than tax – or borrow – more, government needs to spend less.

Parliament has demonstrated that cross-party opposition can block tax rises. Now we need cross-party support for spending cuts.

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