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UK finance minister forced to reverse key income tax hike after backlash


The U.K.'s finance minister was forced on Wednesday to backtrack on his intention to raise national insurance contributions, which go to help pay for the country's health and welfare state, from self-employed workers after facing significant vocal opposition.

Chancellor Philip Hammond wrote a letter to U.K. lawmakers on Wednesday to undo the changes proposed just a week ago in the U.K. government's annual Spring Budget, after a torrent of protesters argued that the hike would fly in the face of a core manifesto commitment.

"In light of the debate over the last few days, it is clear that compliance with the 'legislative' test of the manifesto commitment is not adequate," he wrote, in a move described by commentators as one of the most rapid and momentous reversals of a Spring Budget proposal in history.

The now-abandoned proposal would have seen approximately two and a half million self-employed workers face an average £240 ($293) annual rise in contributions.

The Chancellor had faced challenges to the proposal on several fronts, including from parliamentarians from within his own ruling Conservative party in addition to opposition politicians and the general public.

The U.K. government is awaiting the publication of a report later in 2017 which takes a broader look at the situation of self-employed workers within the U.K.

Prime minister Theresa May confirmed on Wednesday during a lunchtime parliamentary session that her government would review the findings of that research prior to proposing any further changes to the treatment of the self-employed.

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