George Osborne backed entrepreneurs, but has Hammond hung them out to dry?
At times yesterday, Philip Hammond’s budget announcement felt more like a stand-up routine than an economic plan.
“£70m to keep the UK at the forefront of disruptive technology such as biotech, robotics systems and driverless vehicles – a technology I believe the party opposite knows something about!”
“The right honourable gentleman opposite is now so far down a black hole that even Stephen Hawking has disowned him!”
“They don’t call it the last Labour government for nothing!”
But entrepreneurs may not have been quite so impressed as Hammond laughed all the way to the bank – with the money they had earmarked for spending on their businesses, families and tools of the trade – that will now go to the government instead.
The tories tore up their manifesto promises that there would be no increase in National Insurance premiums and instead attacked some of the UK’s most vulnerable workers – struggling startup founders, freelancers and gig-economy workers.
Many amongst this community are self-employed through no fault of their own – the likes of Deliveroo and Uber have been at the House of Commons this week and last pleading with the government to provide more benefits for their hardest working riders and drivers.
But if the budget is anything to go by, it will fall on deaf ears. The Liberal Democrats have already coined a phrase for the last Spring Budget. The OmNICshambles.
A rise in National Insurance Contributions for the self-employed will hit 2.5 million people to the tune of £240 per year.
“Employed and self-employed alike use our public services in the same way, but they are not paying for them in the same way”, says Hammond
“The lower National Insurance paid by the self-employed is forecast to cost our public finances over £5bn this year alone.”
But the Tories seemed to have forgotten that they had promised to freeze national insurance contributions in their 2015 election manifesto.
It will be hard for the UK’s entrepreneurs not to read this hike as a personal attack upon them, and a slap in the face for the startup ecosystem as a whole, who rely on freelancers and the self-employed.
The independent newspaper revealed this morning that some have labelled the effects of the tax hike on the gig economy as “potentially devastating”.
When discussing Britain meeting the EU’s budget targets (for the first time in 6 years), Hammond joked:
“I won’t hold my breath for my congratulatory letter from Jean Claude Juncker.”
Or from anybody within the startup community, either. When Britain’s entrepreneurs vote with their feet and make a bee-line for Berlin, the joke may well be on him.
The budget may be famous for the little red briefcase; but yesterday, Hammond made a British institution feel more like handbags at 40 paces.