'60% of self-employed will benefit from NI changes mooted by Chancellor'

Margot James MP attends the 2013 Stonewall Awards ceremony held at the Victoria and Albert Museum in London

Proposals for a £2 billion tax hike for the self-employed in the Budget were simply "mooted" by the Chancellor, a Business Minister has said.

Margot James said there was going to be a review over tax later in the year and defended the National Insurance reforms outlined in last week's Budget.

Responding to accusations from shadow business minister Bill Esterson of a "tax grab", she said: "With regard to National Insurance, he knows that over 60% of people who are self-employed will actually benefit from the changes that were mooted by the Chancellor last week."

Chancellor Philip Hammond has faced growing pressure to make a u-turn on the planned 2% hike in Class 4 National Insurance Contributions (NIC), with more than 20 Tories raising concerns on the issue.

Mr Esterson pressed the Government on the proposed NIC rise and accused ministers of failing to listen to small businesses.

Speaking during business questions in the Commons, he said: "They (The Federation of Small Businesses, or FSB) said the proposed National Insurance tax grab is an absolute kick in the teeth for small business, just at a time when we need to create more entrepreneurs, not fewer.

"When the minister said the Government consults the FSB, perhaps in future they might listen to them and do what they suggest?"

Responding, Ms James said the small business leaders were pleased with a number of new measures outlined in the Budget.

She said: "I think that the small business world feels more love from this side of the House than they would from the opposition, were they to take our place in Government.

"On the specific question he raises, the FSB, I know, lobbied hard on a number of points on National Insurance, on also business rates and on quarterly reporting of tax accounts.

"On the latter two, they were very pleased with the outcome that the Chancellor provided."

Labour's Jess Phillips (Birmingham Yardley) pressed the Government on improving maternity pay for freelance mothers, whose numbers have risen by 79% since 2008.

She said: "Whilst I welcome the Government's announcement that they will consult further in the summer on fairer maternity pay for self-employed mums, this was recommended 13 months ago.

"Why is it taking the Government so long to act on this crucial issue for these women when it took the stroke of a pen to increase their taxes?"

Ms James replied: "As I said in my previous answer on National Insurance, the increase in taxes, which itself is under review, will be ruling ... in terms of the maternity and paternity issues that she raises, I should hasten to add.

"That consultation will run its course this summer and she will have an answer before the end of the year."