The Budget: #BBCAskThis BBC News Special

The Philip Hammond has increased national insurance for self employed

people in his first budget, leading to accusations he has broken a

The budget also included an extra ?2 billion for the social care system

in England as the Chancellor said he was putting the economy

As we start our negotiations to exit the European Union, this budget

takes forward our plan to prepare Britain for a brighter future.

The Labour leader Jeremy Corbyn said the budget was built on unfairness

and provided tax breaks for the few and public service cuts for the

Utter complacency about the crisis facing our public services

and complacent about the reality of daily life for millions

In other news, police searching for missing airman Corrie McKeague

say they are confident his body will be found at a landfill site.

The RAF serviceman has not been seen since an night out

The website WikiLeaks published thousands of pages of what it says

The documents appear to reveal attempts to use household

gadgets to eavesdrop on people's conversations.

We have been asking for your questions and suggestions on

We have got three experts here to answer your questions.

Paul Lewis, a financial journalist and presenter

Michelle McGrade, a finance expert and chief investment officer at TD

And Anita Monteith, tax manager at the

Institute of Chartered Accountants in England and Wales.

Let's take a closer look at some of the main talking points

He announced a 1% rise next year in National Insurance contributions

for the self-employed and another rise the following year.

The move appears to contradict a Conservative manifesto pledge

Mr Hammond also announced an extra ?2 billion for social care

in England over the next three years, with ?1 billion

There were also measures to soften the impact of the business rates

re-evaluation in England with ?435 million for firms

affected by increases, including a hardship fund

for the worst hit as well as a ?1000 discount for most pubs in England.

There was a cut in the tax-free dividends allowance for shareholders

and directors of small private firms from ?5,000 to ?2000

Mr Hammond is also spending ?100 million to place more GPs

in accident and emergency departments in England

And there was a change in technical education with the introduction

of a new broad-based T-Level qualification, as well as an extra

OK, let's begin. We are going to start with the first question which

One person from Sheffield has texted us to say: I'm a nursery director

and we pay a big amount of money for our business rate every

If our business rate could not be reduced in the future,

we do not think we can stay in this business any longer.

Is enough being done to support small businesses in this budget?

Actually, yes, not enough is being done right now. But this is a

controversy that has arisen because the new business rates have just

been announced. What has come about is that it is really an unfair tax

and it does not fit and is not fit for purpose today at all because

companies need to be taxed on their revenues rather than on the building

that they are residing in. For example, this nursery, you could

probably convert that to a couple of flats and the rates they would pay

would be much less. This really needs to be thought through. There

is a fund that looks like something temporary while they really think

through this whole situation because it has really hit the small

businesses in a big way actually. But if the appeals process for

dealing with any inaccuracies in terms of re-evaluating these rates

was quicker and speedier and timely, then the situation would not be

quite as bad, would it? One thing that all businesses look for is some

sort of consistency. People do not like shocks to stop they will budget

from one year to the next and the revaluation exercise that has been

long overdue I think a lot of people have found the sudden increase quite

difficult to cope with, don't you think? They have been working this

thing out for seven years. When they get the bill it will be seven years.

Although in some parts of the country, particularly London and the

South East and Bristol, business rates will be going up, but there

are parts of the country where they will be coming down. One lady said

hers was coming down to zero which is good news for her. We have got

this 300 million which will be for local council to allocate, to sort

out the problems in their area. It is not a lot of money, but it is

good news. If you stop being a small business by definition and go to a

big business, you will not have arise. There is a special ?1000 for

pubs because they pay the tax partly on their turnover. I was talking to

a public earlier who was very pleased. He is still facing a big

rise, but it is not quite so big. This is our second query.

And Elliot Mason asks: Will the rise in social care funding

help to alleviate the strain on the NHS by a noticeable amount?

Paul? I do not think so. Local authorities say to me that extra ?2

billion will be swallowed up in the higher minimum wages they will have

to pay to care workers. It is interesting, but it is not

necessarily the answer. It only helps people who the local authority

are paying for and that might help get a few more people out of

hospitals. But for all the people who pay for themselves there is no

change except a green paper, a discussion, another review, the

third we have had in the last dozen years. It is a gesture rather than

an answer. 1 billion will be straightaway, so that is something

that at least local authorities can say, we can start to alleviate the

situation. People who have immediate cash needs, adding ?1 billion

immediately means they can move on. But it is divided between hundreds

of local authorities. Our next question.

One of the most talked about announcements in today's

Budget has been the reform to National Insurance contributions.

The Conservative manifesto said they wouldn't raise it,

but the Chancellor today said some self-employed workers,

those on Class 4 rates, will find it go up to 10% and then

We'll get some of your questions on National Insurance in a moment,

but first Rita Chakrabarti has been speaking to three small

business owners to see what they make of the plans.

No need to worry about the sums when you're small,

Charlotte and Sarah are both self-employed,

and started their separate businesses after having children.

Charlotte says the Chancellor's hike of national insurance contributions

I think it's affecting kitchen table businesses,

you know, mums starting up after maternity leave.

They don't get the same benefits you get as an employed person.

If we're sick or anything, we're still working through,

The Chancellor says it is fair, this is bringing you up

to the levels that other employees have to pay?

If I was working, I would be paying that level anyway.

Ruth also started out as self-employed, but she now runs

a larger business selling birthing pools, which has a turnover

The national insurance increase will affect her.

But that should be offset by cuts in corporation tax.

The Chancellor is taxing businesspeople on a

But he's sneaking in the corporation tax is going down.

Overall, the question is where that balance lies.

Overall, it sounds like you're going to be roughly...

Today's reforms to National Insurance contributions

and previously announced changes means that there are

Someone who is self-employed, with average earnings of ?12,700

will be ?70 per year better off in 2019-20.

For a self-employed person earning an average of ?17,300,

And a self-employed management consultant on an average of over

?51,000 will be ?620 worse off per year.

There's not much sympathy down the road in Keighley,

at Dobson's Gaskets, a family business that's

They're all classed as employees here and so all taxed

They say quite right too, to the Chancellor's changes.

At the moment, they're paying a lot less for very similar

amounts of cover and help from the Government.

They still get the same state pension now and they still

have a lot more flexibility in their own lifestyle.

You think it's absolutely right and fair that the

There was blue sky over Yorkshire today.

But, as always on Budget Day, only for some.

Our next question is about National Insurance and it

He asks: How does the rise in national Insurance Contributions

for the self-employed bring parity, when employees have access to paid

The way I look at it is if you are being paid an amount like the

Chancellor said, it does not matter how many weeks you have worked to

earn that amount of money, you have earned the same amount of money. So

if you have had six periods and days off and holiday, you are earning the

same amount of money for the year. So I can see the fairness in that. I

do understand self-employed people feel as though they cannot take

holidays because they are managing their own lifestyle, but that is one

of the reasons why they are self-employed and that is why it is

attractive for a lot of people, and a lot of women, to be self-employed

because they can have a flexible lifestyle. They can work when they

want and do the type of work they want, they will not be dictated to

by an employer. I see it as kind of fair actorly. Does it feel fair to

you, Paul? Yes, I think it is fair and I spoke to somebody who has been

self-employed for a long time. The point is you now get the same state

pension. National insurance menu pays for the state pension.

Self-employed people off and got less and now they get the same. So

it does seem fair. The point about sick pay and holidays, holidays is

how you manage your business. But I think sick pay and maternity pay,

paternity pay, that is paid for two national insurance and self-employed

people do not get those things. The Chancellor has said he will look at

that. My prediction is by 2018 there will be some concession so people

will get certainly parental benefits by that time. Sick pay I am not so

sure. I think it is fair and eventually it will probably go up to

12%. There is another 1% to go before that announcement. But the

amount of money it will bring in, ?145 million, that is a drop in the

ocean. If you take this change alongside the dividend allowance, we

will be looking at ?1.5 billion per year within a couple of years. It is

very important to put this in the context of other work that has been

going on. You look at the whole package around employment and

self-employment. We have tax rules and law rules and they are

different. We are expecting in June to hear from Matthew Taylor who has

been looking into this, but in the UK we have never had a discussion

about whether that should be a difference between the national

insurance you play as an employee and the national insurance as a

self-employed. We need to have that debate and if we think there should

be a difference we need to decide what that should be. And wide. The

numbers of self-employed are going up. Dramatically. Some of them pay

less because the flat rate class two is being scrapped in 2018. That is

?145 a year. They will not pay that any more. If you do not earn enough

to pay as much in the extra 11%, you will do better. I did not check the

Chancellor's figure, but at about ?16,000 per year you will pay more,

below that you will pay the same or less. That is worth saying. A lot of

people who start off in self-employment earn very little.

A question now from Tony Humphreys, who says: I am a software developer.

I would love to start contracting, but I am hindered by IR35.

What is that? I was really hoping this would not come to me. It is the

number of a press release that was issued in the 1990s. Back in 1999.

Anita is going to take over. It was the Inland Revenue, now HMRC. What

this did was to look at people who were arguing that they were

self-employed by simply putting a contract of self employment in place

between them and the person they did work for, when actually they were

really employees. They would leave work on Friday as an employee and

they would come back with this new, shiny contract and say I am

self-employed and pay less tax, on a Monday. The employer loved it

because they did not have to pay sick pay or holiday pay or anything

else and they can take them on. They loved it as well. The national

insurance was a big one. The comments I have been getting today

is people who want to be contractors find it very difficult, but as a

self-employed person they have these advantages, but employers demand it.

Some would like to be employees, but they cannot be because employers say

you are self-employed, even though they are turning up at the same

office at the same time every day, behaving and acting like an

employee. That has to be looked at as part of this. I cannot answer the

question directly. I do not know whether it will change very much.

The whole thing is being looked at and I think slowly we will see a

change. At the end of last week contractors can use to determine

whether the contract they are working under is employment or

self-employment. We are looking namely at people who have

incorporated as a 1-person company and I then working for somebody

through the umbrella of a company. We have a few more questions.

Terence O'Neil also wants to know about the state of the economy.

He asks: "What use is 2% growth if the currency

I would like to ask him what he would think if growth was 0% and we

had inflation. Growth is a good thing. Let's talk about the growth

first of all. We are expecting growth in this country and we are

also expecting growth in the world. Just about everywhere in the world

we are seeing a pick-up on economic activity and that has to be a

tailwind for us in the UK. With sterling falling, a lot of our

exporters are doing very well, thank you very much, from that because our

goods cost less overseas. If the companies overseas are spending more

and buying more of our goods, it is a good thing. But on the other hand

with sterling falling it does mean that our goods, mainly clothing and

food, will cost a bit more and it is true it will have a bit of a

knock-on effect. We think that wages probably are not going to go up as

much as people would like. They will not keep pace with inflation?

Possibly not. We have got to enrolment coming in as well and a

lot of employers are using that as a reason for not increasing wages so

far this year. But on productivity, if the Chancellor is right and we

get productivity gains through his measures and through just growth as

well, then that is good for our economy and it should offset some of

this fall in sterling. We will see on that one.

Our next question comes from Martha, has messaged us to say:

What amendments will be put in place in regards to the benefit system?

Will it still be financially better to live off benefits and not work?

I'm not sure about that last bit, sorry, Martha. What changes do you

see coming? We have two systems running in parallel. We have got the

old tax credit system and the new Universal Credit system. Both of

it advantageous to go out and work. it advantageous to go out and work.

It is to supplement the needs of people who are on low incomes. The

problem with the switchover from the tax credit system to the Universal

Credit system is that it has proven much more difficult to get the IT

right and perhaps was anticipated in the first place. I think it will

take another four or five years because the big switchover will

happen from one system to the other. We have at the same time a new

project to make tax digital which will make every business in the UK

have to submit digital records. With all of that new IT needing to feed

into the same system... It will be a big mess. It will be a big challenge

for everyone. You are rolling your eyes. Challenge is one thing, mess

is another. There are very few people know who are better off on

benefits. The jobseeker's allowance is ?71 a week. If you want to live

on that, stay unemployed and leave the job to someone else in my view.

I think Martha is wrong about that. There will be no more changes in

benefits, Philip Hammond has made that quite clear. The changes will

happen. He made it slightly better to work on Universal Credit, let's

not go into it, but he announced that today. But the austerity

measures, the cuts for disabled people and single parents, they will

people and single parents, they will carry on.

On to savings now, and Robert has sent this question in.

He says: What is the government doing to encourage people to save?

We have now got so many different forms of Acers I have lost count. I

have to mention the savings allowance we still have if you are

lucky to find somebody to give you enough interest to make use of it.

We were talking earlier about the absence LISA. It is a new lifetime

ISA. You can pay 2.2% over three years and you put in ?2000 and after

the end of three years you will have about an extra ?200. The rate was

announced today. It is good news for people who want to put away ?3000

over three years. They must guarantee that. We must

they are earning in a month and put in a little bit all the time.

The last question, how much longer can we borrow? If you want

certainty, you will end to the UK Government. There are oil-rich

states who want a guaranteed return for maybe 20 years. They want to

know exactly what will come back for their pensions plans. There is no

shortage. But the odd thing I noticed today is that the interest

on the debt that the government owes its 50 billion a year. That's 50

billion is exactly what the government will borrow next year. So

we are borrowing 50 billion to pay the interest on our 1.7 trillion. If

we were a household, that would be bad. We could use that interest

payment for other things to pay for things like social care etc. We do

want that borrowing level to come down, but as Paul said the UK is a

safe bet and if we are growing the way we say we are growing, it is

even safer. I think we are doing well, we are bringing the deficit

down each year, but we have got to get rid of it. The debt is going up

every year. Austerity is probably another eight or nine years. At

least. It has been great having you in. Many thanks for the questions.

And for more reaction to the budget you can go to the website. You will

find live updates and full analysis from all our reporters. Many thanks

again to everybody here and to you for watching. Let's join Nick Miller

for all the weather. We have the highest temperatures

overnight. We have cloud and damp and drizzly weather inside