Treasury Minister Alfred Cannan has confirmed that plans to abolish one of the categories of National Insurance payments will not take place until the UK does the same first.

In his 2017 Budget, Mr Cannan announced a plan to abolish the Class 2 category of NI. That is a fixed rate payment for self-employed workers. The idea was to increase the Class 4 rate for the self-employed, which is based on earnings.

It came after the UK Government announced plans to increase self-employed NI contributions, before being forced into a U-turn in 2018.

However, in the immediate aftermath of that U-turn, Mr Cannan said there were no plans to reverse the decision to abolish Class 2.

He insisted that the abolition of Class 2 and consolidating all self-employed NI contributions in Class 4 was a ’much better approach’.

In the House of Keys on Tuesday, Lawrie Hooper (LibVannin, Ramsey) asked why, in the list of policy decisions to be enacted, it is now classed as ’awaiting UK decision’.

Mr Cannan said: ’The UK and the Isle of Man still operate a social security agreement that covers short-term benefits such as Jobseekers’ and incapacity benefit, and this agreement can only continue to work whilst we operate a similar NI scheme.

’When the UK Chancellor announced, in September 2018, that this proposal was being put on hold until after the next General Election, I made a similar announcement in my 2019 Budget speech that Treasury would not progress with our plans to abolish Class 2 until we knew what the position was going to be in the United Kingdom.’