"BUDGET WILL DEVASTATE CORNISH SELF-EMPLOYED"- broken promise hits Cornwall hardest


23.5% of the Cornwall workforce is self-employed, 16% as working mainly at/from home.

The 2% rise in self employed NI is a £1 billion tax rise on this group nationally

Philip Hammond’s tax on the self employed, announced in yesterday’s 2017 Budget will hit Cornwall particularly hard, argue Cornwall’s leading politicians.

The Chancellor has broken a Conservative manifesto pledge by introducing a tax on Cornwall’s 63,000 one man bands and sole traders, with a rise in National Insurance payments that will cost them each more than £200 a year. Meanwhile cuts in corporation tax will still go ahead and wealthy pensioners will not be asked to pay a greater share.

Councillor Tim Dwelly  Cornwall Labour Group leader, who chairs Cornwall Council’s Economy Committee, has issued a stark warning for people who work for themselves in Cornwall.

Around one in four people in Cornwall are self-employed,” he said. “And many of these people work from home. We have much higher levels of self-employment here than the rest of the country. The 2% rise in National Insurance – effectively a tax hike on people who work for themselves – will hit Cornwall really hard. The £1 billion tax hike breaks the Conservatives’ manifesto promise and shows Cornwall the dire consequence of having Tory MPs.”

Tim Dwelly

“People affected will include builders, plumbers, electricians, taxi drivers, fishermen, artists, small shop owners, web designers, therapists, the list goes on an on. So many families have at least one person working this way. And many have done so because there simply weren’t the opportunities for a well paid full time job. As the Government cuts the public sector, many are choosing self-employment to stay off benefits. Some will feel they have been forced out of jobs and are now being punished for having a go at their own business or profession.”

Leader of the Liberal Democrat group on Cornwall Council Adam Paynter said: “This is a tax on some of Cornwall’s hardest working people. It will disproportionately hit Cornwall, as the Duchy has one of the highest rates of self employment in the UK. The Conservatives promised not to increase National Insurance in their 2015 manifesto and it just goes to show that Conservative promises are not worth the paper they are written on.”

adam paynter
Lib Dem Adam Paynter

“Companies will continue to save money by using workers without giving them the security and benefits of staff jobs. Meanwhile, these workers will have to pay more. This is patently as unfair as it is a tax on entrepreneurship and hard work.”

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Chief Executive of the Cornwall and Isles of Scilly Local Enterprise Partnership, Sandra Rothwell said in a statement: “Like most Budgets this is a curate’s egg for business because while the help with business rates will be welcomed and has been a big issue for many of our hospitality businesses in particular, the rise in National Insurance contributions for people who set themselves up in business could be seen as a tax on entrepreneurship and will hit Cornwall and the Isles of Scilly harder because over 20% of our workforce is self-employed. SME owner-managers will also be hit by reform to dividend allowances”

Cornwall Labour’s Cllr Dwelly also points out that people who run small companies will be hit too. Technically these people are not self-employed, they are employed by their companies. “By reducing the tax free dividend they can take from £5,000 to £2,000, Hammond has taken away £225 a year from them in take home pay.”

The Chancellor, Dwelly argues, could have targeted tax-avoiding international companies like Amazon, put a windfall tax on utility companies or banks, or reviewed the giveaways to wealthy retired higher rate tax payers, as better sources of income. “Instead he directly targeted people setting up small businesses who are so important in places like Cornwall. Put together with the terrible low funding he has agreed in the Growth Deal for Cornwall and his failure to make up lost Brexit money and we have a pattern emerging. This Government is happy to make Cornwall poor again.

“Our Tory MPs are going to find this incredible hard to justify. They should be urging the Chancellor to drop this proposal as quickly as the Pasty Tax. We shall see if they are tough enough – or care enough – to do that…”

Steve Double MP for NQY and Snozzle defended and  supported his Conservative colleague’s budget. He said today,

“We also saw business rate relief for small businesses and local pubs. Along with Cornwall Council’s 100% business rates relief pilot I am sure this will make a big positive difference to many who have contacted me about this in recent months.”

“There are also a few announcements which can make a big difference to Mid-Cornwall.”

“First, the Chancellor announced massive changes to education with funding being given to increase the number of training hours for 16-19 year old further education students by over 50%, and then £500 million a year in technical education for this age group. This can make a real difference to those studying in further education in St Austell and Newquay, to develop to technical skills all too needed in our economy.”

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“Secondly, the Government is also making available £100 million to the NHS for investment in A&E departments. This is to allow them to tackle some of the pressures on A&E services through more effective triage systems involving on-site GP facilities.”

“Finally with superfast broadband coverage always a concern in rural areas like Mid-Cornwall I was pleased to see the Government announce we will also support locally-led projects to roll full-fibre with an additional £200 million fund, so people have access to the fastest and most reliable broadband and businesses can compete and grow in a modern economy.”

“These are really positive announcements which I think that many residents across Mid-Cornwall will be pleased to hear.”

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“Concerns have been raised with me about the changes to National Insurance contributions for those in self-employment. As a former small business owner myself I understand these concerns and will be meeting with Treasury officials to understand what their impact will be before deciding whether they are something which I can support.”

“I now look forward to working with my Cornish colleagues to ensure Cornwall gets its fair share of the many positive announcements made in the Budget.”