John McDonnell response to the Government’s u-turn on £2 billion NICs rise in the Budget

John
McDonnell MP, Labour’s Shadow Chancellor,
responding to the Government’s u-turn on its £2 billion NICs rise in the Budget
last week, said:

“This
is a humiliating reversal for the Chancellor forced upon him by Labour’s
opposition. His authority is now shredded after just one Budget, and he tore up
a manifesto commitment to do it.

“We
welcome the Government’s decision to finally listen to Labour’s calls made in
Jeremy Corbyn’s Budget response along with those of business groups like the
Federation of Small Businesses to not go ahead with an unfair £2bn tax rise on
low and middle earners. But they should never have been placed in this position
to start with, and now we face yet another Tory Budget only a year on with a
blackhole in the billions. In 2015, we had the tax credit shambles. In 2016, we
had Personal Independence Payments reversal. Now in 2017 we have the u-turn on
National Insurance Contributions.

"There will be millions of working people who are now breathing a sigh of
relief, but it is the Chancellor who should be holding his breath as
this episode throws up urgent questions that he and the Cabinet must now
answer. 

“Did the
Prime Minister or the rest of the Cabinet, who must have seen the Budget in
advance and known this measure was to be implemented, raise their concerns with
the Chancellor before he announced it, worrying millions of families? It was in
the weekend papers before the Budget so they can’t say they were unaware it was
to happen.

“This is also the second year we have had a Tory Budget with a black hole in it
worth billions. This is not acceptable. What will he do to fill the shortfall
in a Budget he delivered less than a week ago without pursuing unfair tax
increases or further cuts to public services? As the Budget will still see
working people £1,400 worse off under the Government.

"On
the day the Brexit Secretary has admitted that he hasn’t looked into the costs
of the Prime Minister’s negotiating strategy, this is yet more proof that there
is disarray at the top of a government clearly making things up as they go
along.

"We need answers from the Chancellor and accountability at the top of
government. In no workplace would such practices be allowed to continue, and it
should not be allowed from those responsible for the public finances. Labour’s
new roundtable on self-employment will bring together business organisations,
trade unions and self-employed groups to lay out a serious and realistic
strategy to provide a fair deal for the self-employed at a time of major labour
market changes. We are proud to be the party of working people, small
businesses, and the self-employed.”