However, the Chancellor, Philip Hammond has just announced one week after the budget, that they are going back on the decision to increase national insurance contributions for self-employed workers.
In 2015 it was estimated that there were 4.6 million people registered as self-employed in the UK, and the number has been increasing year-on-year. The Chancellor’s decision to target this population with a 2% increase in NI tax was met with massive disapproval from many.
One of the key arguments was that when the Conservative Party was canvassing for votes, their manifesto included a pledge that it would not increase VAT, NI or income tax. The fact that they went against this in the very first budget was not only surprising but also a concern for what lies ahead for the UK.
Having already voted to exit the EU in farcical circumstances, the UK and its economy is certainly on a rocky boat. To make matters worse, a backtracking government whose manifesto pledges are becoming transparent and untrustworthy is painting a bleak future for the UK. However, the Chancellor counter-reacted to the many challenges facing him and has now announced the increase will no longer be applied.
Whilst this action will no doubt appease many, the nature of the way this has happened threatens the authority the UK government has. Announcements such as the public sector borrowing £51.7 billion for 2016-2017 is expected to decrease over the years is now met with caution as the UK public can no longer trust these forecasts given the recent state of affairs.
The UK public and their self-employed population in particular need the support and guidance from their government to work together to boost the UK economy. Instead, small businesses are finding themselves further in debt and/or facing closure due to the increased overheads and costs associated to running a business in the UK.
The implementation of Brexit will plunge UK based businesses into further difficulty, especially those that pay for services or products outside of the UK. The value of the GBP sterling has fallen massively, which has a huge impact on trading with businesses outside the UK.
Businesses now need to rapidly reduce expenses as much as they possibly can and be more careful when taking out credit. In the US, businesses can turn to companies like LendGenius for business loans. Businesses in the UK are not as fortunate with their banking structures, and for years now, the UK banking industry has been blighted with problems ranging from fines and repayments for legacy miss-selling to other big issues like contesting bankers’ big bonuses.
It would be fair to say that the general UK public do not hold a lot of trust in their banking industry or their government right now. Hopefully, the fact that the Chancellor has listened to the public will pave the way for better future decisions.