Government finally admitted defeat amid anger over policy but Brexiteers still are plotting a coup to axe Hammond and dominate Cabinet
Theresa May has suffered her worst day since becoming Prime Minister with a series of blunders which saw her Government accused of chaotic incompetence and recklessness.
The Prime Minister was jeered in the House of Commons as she explained why she now wants to completely scrap a plan to hike taxes for the self-employed because she was unashamedly defending it just days ago.
The “safe hands” reputation of her Chancellor Philip Hammond was also questioned as he unveiled the U-turn, having denied in interviews at the weekend he would budge on the issue.
Relations between the pair were strained as Downing Street was forced to confirm Ms May had “full confidence” in her Chancellor.
Brexiteers who see Mr Hammond as a potential block to their ambitions appeared to use the mess to question his credibility, but the Government’s own experts also slammed a plan which denied disability benefits to 160,000 people.
As that fiasco unfolded, Brexit Secretary David Davis raised eyebrows by revealing he has done no assessment of the economic impact of leaving the EU without a deal, despite Ms May vowing to potentially do so.
The day threatened to become a catastrophe after it then emerged that 12 police forces have passed files to the Crown Prosecution Service relating to Conservative election expenses.
The one saving grace for the Prime Minister was Labour leader Jeremy Corbyn’s failure to pull himself out of the box an land a blow on Ms May in the House of Commons, despite the abundance of easy targets.
Government sources claimed the decision to finally scrap the Budget’s hike in National Insurance Contributions of millions of self-employed workers was taken at a meeting in Downing Street attended by Ms May and Mr Hammond.
It also came after days of intense pressure from Tory MPs who feared getting skewered in their constituencies by voters angry that the Tory election manifesto had promised not to raise National Insurance Contributions. .
In a letter to Tory MPs, Mr Hammond said: “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.”
Mr Hammond was given a tougher time by shadow Chancellor John McDonnell later on when he branded the whole episode “chaos”, “shocking and humiliating”.
The Conservative 2015 election manifesto clearly stated four times the Tories would not increase NICs once in power, in a move that may have helped convince millions to vote for the party.
Brexit backing Tory peer Lord Lamont said: “This was a bad error of judgment and should never have been proposed.
“But this sad affair raises questions of process and how such a decision came to be made in the first place.”
While many Tory MPs were relieved the Government was backing away from a potentially damaging tax rise, others were angry they had been sent out to defend the measure in the days before the U-turn.
Head of Taxation at the Institute of Directors Stephen Herring said: “The whole National Insurance saga can only be described as chaotic.”
Meanwhile, controversial plans to withhold the Personal Independence Payment from thousands of claimants with mental illnesses were slammed by the Government’s experts in the Social Security Advisory Committee, which called for the changes to be delayed.
The scandal around election expenses deepened as it emerged police had passed files to the CPS relating to the Conservative Party’s battle bus campaign in the 2015 election, examining whether strict spending limits in target seats were breached.
Colchester MP Will Quince revealed he had been interviewed by police – the second Tory known to have been quizzed by officers investigating the matter.