The increase was announced in the Budget last week but Chancellor Philip Hammond has now written to Conservative MP's and said there would be no increase during this Parliament.
On Twitter, Chesterfield MP Toby Perkins said he was "delighted" at the news, adding: "Congrats to all politicians and business groups that forced the u-turn."
And Scott Knowles, Chief Executive at East Midlands Chamber, said: “The increase was very unpopular with the self-employed and its announcement in the Budget caused a massive backlash which included claims that it broke a promise made in the Conservative Party manifesto not to increase National Insurance Contributions (NICs).
“The NICs rise, together with the cut to dividend allowances, was not viewed favourably, so this latest move is welcome. Mr Hammond needs to look at business and employment taxation in the round to ensure it is competitive and equitable.
“At a time when UK plc needs to be encouraging entrepreneurialism, the NIC increase was seen to do exactly the opposite and it’s good for the self-employed, for the economy and for UK plc that Mr Hammond has reversed his decision.”