WE live at a time when the rate of price inflation exceeds that of wage inflation, the outcome being that most of us are getting poorer. Measures announced in yesterday’s Budget such as the increase in National Insurance contributions for the self-employed can only make this worse (“Tory tax rise for self-employed is branded an attack on aspiration”, The Herald, March 9). We are told that austerity measures and a contraction of public services are secondary to creating a thriving economy, yet the Government’s own figures demonstrate that current improvements in the economy are an illusion based on consumer spending funded by historic levels of unsecured debt.

Personal debt has always been a factor in the UK economy and at times it has been worse than the current third-quarter 2016 level of 143.9 per cent debt-to-income ratio but the significant change is that secured borrowing such as for mortgages has fallen and unsecured borrowing to fund day-to-day expenses has increased dramatically.

The UK economy is only being kept afloat by historic levels of personal borrowing. For example, in 2014 household consumption spending totalled £1,104 billion (just over £1.1 trillion). Gross lending to consumers amounted to £428 billion, more than half of which was unsecured borrowing, which accounted for £1 in every £5 of consumer’s spending. Since then personal borrowing has substantially increased. Studies show high income households are more likely to have debt than low-income households. Survey data collected for the Department for Business, Innovation and Skills (BIS) show that 43 per cent of households with an income under £13,500 have no debt while 79 per cent of households with an income of £50,000 owe money. Despite the popular misconception, debt is not confined to the lower orders’ neither is failing to repay it. The most popular form of unsecured borrowing is a credit card, with 25 per cent of the population running an outstanding balance and lenders being forced to write-off tens of billions of unpaid debt each year from this cash-cow.

What is the significance of this? The point is that not only are we being given a false picture of the current state of the economy but that the increase in private borrowing is unsustainable and as personal financial resources contract it is predicted that the rate of homes being repossessed will increase as will the rate of personal insolvencies. All this information is either prepared by or available to our Government yet despite the Chancellor’s jokes and the Prime Minister’s giggling fit they decided to ignore it and seem prepared to consign thousands of their subjects, yes subjects as that is how they treat us, to the scrapheap of poverty.

David J Crawford,

Flat 3/3, 131 Shuna Street, Glasgow.

LET us examine the background to the Class 4 National Insurance (NI) change in the Budget. Class 4 NI is paid by those people who work for themselves and many of them hire themselves out to other bigger companies. Their rate of NI payment has historically been less that the NI payment made by the bulk of people on PAYE. The Chancellor raised the Class 4 rate of payment, nominally to bring them into line with the rest of the working population.

This might be fair if it was the whole story. The reason that people end up on Class 4 is because the companies that they work for will not take them on as employees. These companies are avoiding any responsibility for employers’ NI, any responsibility for holiday pay and all the other costs involved in carrying through employers responsibilities.

The Government is happy for this method of working to continue and to increase, indeed the reason action is being taken is because the numbers in this situation are increasing year on year. It is happy for the costs to be transferred from employers to employees but does not want to lose the income stream. There is no attempt to regulate the labour market, no attempt to control the increasing numbers on zero hours contracts which penalise those at the bottom of the heap that can get no other employment.

Looking forward into the abyss of Brexit we will find that, in the race to the bottom, in competition with other low-wage low-cost economies, the United Kingdom is moving the goalposts to attract they type of employers that will take advantage of the lack of workers’ rights and treat them as a commodity to be hired and fired at will.

DS Blackwood,

1 Douglas Drive East, Helensburgh.

PHILIP Hammond is correct in highlighting the inequality in the amount of national insurance paid by employed and self-employed workers. However, there is an even greater inequality between employed persons with one full-time job compared to another employed person with two or more part-time jobs. Someone with five part-time jobs earning each producing an income of about £8,000 per annum will pay no, or a minimal amount of National Insurance, whereas an individual earning £30,000 this year will have paid National Insurance of just over £2,500 per annum in national insurance.

The solution to this problem is quite simple and that is to abolish National Insurance contributions for individuals and replace these contributions with a 10 per cent increase in the rate of income tax. In addition to reducing unfairness there will the added advantage of making the system simpler and easier to administer.

Sandy Gemmill,

40 Warriston Gardens, Edinburgh.

WHY all the commotion over a yearly average increase of £240 for the self-employed?

I was self-employed until I retired last year at the age of 78. I am now a Scottish pensioner who, like many others is paying £419 more this year in council tax.

Sole reason for this increase – I have worked harder and longer and therefore have a more valuable home.

Alan Dickson,

26 Newtonlea Avenue, Newton Mearns.

IAIN Macwhirter (“Hammond taxes by stealth and poses challenge to Sturgeon”, The Herald, March 9) believes income tax devolution is the worst form of fiscal autonomy for the Scottish Government, and he is absolutely right.

Having control over tax policy sounds great on paper but my, what a responsibility when your tax base is eroding against a backdrop of poor economic data.

The fact is the SNP cannot raise taxes when those who actually pay meaningful tax in the 21st century are highly mobile and unwilling to do so.

The poisoned chalice of devolved tax policy is indeed a ticking bomb in the SNP’s already overly optimistic economic argument.

Andrew Lapping,

Hamilton Capital Partners, The Beacon, St Vincent Street, Glasgow.

WE should all be grateful to our esteemed Chancellor Philip Hammond for a Budget which moves Scotexit closer. His meaningless budget tinkered round the edges of the problems facing the UK and did nothing to tackle the inequalities facing many of the poor parts of the population of the UK. So much for all the pronouncements made by Theresa May on the steps of Downing Street. If we in Scotland spend more on the poor parts of our society then we can hold our heads high.

Dave Biggart,

Southcroft, Knockbuckle Road, Kilmacolm.