Did the Chancellor drop the ball with NICs u-turn? PR pros give their view

Philip Hammond's embarrassing climb down over National Insurance Contributions has harmed his credibility and shows the government's wariness about angering its own MPs during a critical period, comms pros have told PRWeek.

Pic credit: PA/PA Wire/PA Images
Pic credit: PA/PA Wire/PA Images

When the Chancellor delivered his Budget last week, the chuckling from Conservative benches at Philip Hammond’s jibes to the Labour Party suddenly turned to howls of outrage when he dropped a clanger over the announcement to raise National Insurance Contributions for the self-employed.

Criticism of the party for abandoning a 2015 manifesto pledge not to raise National Insurance was probably to be expected, but it was the succession of prominent Conservative backbenchers accusing the leadership of betraying one of the party’s core values - to support entrepreneurial Britain - that led Hammond, just one week later, to return to the despatch box and tell MPs there would be no rise in the tax during this Parliament.

He told the House on Wednesday: "It is very important both to me and to the Prime Minister that we are compliant not just with the letter, but also the spirit of the commitments that were made. In the light of what has emerged as a clear view among colleagues and a significant section of the public, I have decided not to proceed with the Class 4 NIC measure set out in the Budget."

Dylan Sharpe (pictured above), head of PR for The Sun, thought the sheen was now rubbing off the Chancellor.

He said: "On the one hand Philip Hammond has done the right thing correcting his error quickly. On the other, the speed with which he's u-turned has harmed the reputation he's built for being a steady hand in No 11. Many Tory MPs - and a previously cordial media - will be viewing the Chancellor in a different light after the past week."

Helen Searle (pictured above), head of corporate at Cohn & Wolfe, thought the climb-down would harm both Hammond and the Prime Minister’s credibility.

She said: "This major u-turn in his first full budget casts doubt over Hammond’s credibility without doubt, but his announcement would have been sanctioned by the very top – so the credibility impact must surely go beyond him."

But, said Searle, Labour had done little to capitalise on the opportunity.

She added: "From a communications perspective, this could have been a field day for the Labour leadership. Why on earth not use the full force of PMQs to expose the situation? A missed opportunity if ever there was one."

For Michelle Di Leo (pictured above), head of UK public affairs at FleishmanHillard Fishburn, the message was of a government trying to pick its battles wisely.

She said: "The u-turn reveals how sensitive the government is to criticism from its own backbenchers. Keeping them on side through the process of the Brexit negotiations is going to be critical and the PM won’t want to fight more battles with them than she has to."

Meanwhile Stuart Thomson (pictured above), head of public affairs at Bircham Dyson Bell, called Wednesday’s announcement a comms failure.

He said: "The NIC u-turn betrays a worrying lack of co-ordination between No 10 and No 11. As the major Budget announcement, someone should have realised that it would gain media attention. What may be a perfectly sensible budgetary move does not always make a perfectly sensible political move especially when it goes against everything the Conservative Party has portrayed itself as since at least the time of Mrs Thatcher."

Meanwhile, the CIPR and PRCA have welcomed the u-turn, but called for change to tax-free dividends and 'staggering' business rates.

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