GP partners will no longer have to pay increased national insurance contributions from next year after the Government u-turned on its budget decision.
Medical accountants had warned that the plan to increase NIC for self-employed people by 2% over the course of the next two years would completely wipe out any uplifts to GP contractual funding, if the Government continued to apply 1% year-on-year public sector pay rises.
Under the plans announced in last week’s Spring Budget, the main rate of class 4 national insurance contributions was to increase from 9% to 10% in April 2018 and to 11% in April 2019 ‘to reduce the gap in rates paid by the self-employed and employees’.
But chancellor Philip Hammond has written to MPS that there will be ‘no increase’ to NIC ‘in this Parliament’.
Explaining the u-turn to MPs in the House of Commons this afternoon, Mr Hammond said: ‘Given that the interpretation that is clearly out there of the manifesto commitment that is made, we think our priority now is to show that we will deliver on the spirit as well as the letter of that commitment and we will not increase national insurance contributions in this Parliament.’
He admitted this meant having to address how pledges on spending from the Spring Budget statement would instead be financed.
As previously reported, this included £2bn for social care and £100m to put GPs in A&E departments by next winter.