The government has dropped plans to raise national insurance payments for the self-employed.
Chancellor Philip Hammond has written to Tory MPs telling them there will no increase in national insurance payments “in this parliament”.
Mr Hammond had previously unveiled plans in last week’s Budget to increase contributions. The move was heavily criticised for apparently breaking a 2015 Conservative manifesto pledge.
Latest data from the Office for National Statistics shows the construction industry has around 940,000 self-employed workers, out of a total of 2.3m employees across the sector.
The chancellor said he had made the decision to drop the changes “in the light of the debate of the last few days”, according to a letter published in the Guardian.
Class 4 national insurance contributions were due to rise from 9 per cent to 10 per cent next April, and to 11 per cent in 2019.
The move was aimed at addressing the fact that employees were taxed more heavily than the self-employed.
In his letter to MPs, the chancellor said he would continue with the plan to abolish class 2 national insurance contributions from April next year.