Conservatives cast doubt over IR35 repeal pledge

Iain Duncan Smith, the leader of the Conservatives, has told UKTECH that the Conservative party no longer has a specific policy on IR35, although it remains opposed to it.

Much of the party's policy is currently under review, however, Conservative HQ would not confirm that IR35 remained on its list of legislation to repeal.

Following a speech to industry leaders at the British Chambers of Commerce's annual conference in Westminster, Mr Duncan Smith told UKTECH: "IR35 remains a disaster for enterprise and for entrepreneurs. We want to encourage those people in the high tech areas who have been discouraged by IR35."

UKTECH asked Mr Duncan Smith if the Conservative Party would maintain its pledge to repeal the legislation under his leadership.

He replied: "We don't have any policy on that at the moment, but you should know that we remain very much against it."

In his speech, Mr Duncan Smith attacked the Government's budgetary commitments to British industry as "just words."

He said: "Business has been hit hard by this budget at a time when productivity is at a lower level than that of our international competitors. The Federation of Small Businesses estimates the cost of raising National Insurance will be two billion pounds, describing it as 'sickening'; the Confederation of British Industry put the figure at £2.5 billion. In his first five Budgets, the Chancellor piled on £6 billion a year in extra stealth taxes. The National Insurance hike amounts to a tax on jobs and I believe the Chancellor is raising the level of income tax on the service and public services sectors whilst increasing the burden on small businesses with very small turnovers - the equivalent of an increase in corporation tax of three per cent."

The Conservative Party has long been opposed to IR35 and formally pledged to repeal it on 15 February, 2001 under William Hague's leadership.

Alan Duncan, junior Shadow Trade spokesman at the time, pledged to repeal IR35 at the Conservative Party Conference the previous year as part of a campaign being driven by Shadow Chancellor, Michael Portillo.

The Conservatives briefly sparked fears that they would abandon their pledge to repeal IR35 if they came into power last year when Oliver Letwin, Shadow Home Secretary and Michael Howard, Shadow Chancellor of the Exchequer hinted that the party would abandon long-standing commitments to tax cuts in an attempt to win voters' trust on public services.

A spokesman told UKTECH at the time: "I see no reason why there would be any change to our stance on IR35 - I believe our position on it is right."

No response has been forthcoming from the Conservative Party following the comments by Iain Duncan Smith.