National Insurance Contributions (Secondary Class 1 Contributions) Bill

(Limited Text - Ministerial Extracts only)

2nd reading
Tuesday 3rd December 2024 Commons Chamber

[The Exchequer Secretary to the Treasury (James Murray)]

I beg to move, That the Bill be now read a Second time.

In her Budget statement on 30 October, the Chancellor set out the difficult decisions that we as a Government have been prepared to make on welfare, spending and tax. Those decisions were not just difficult but necessary, given the fiscal irresponsibility and economic mismanagement that had become hallmarks of the previous Government. We inherited a mess, so those decisions were needed to fix the public finances, fund the NHS and other public services and deliver economic stability. We have been determined to take those decisions while protecting working people. That is why our Budget made no changes to income tax, the rate of VAT, or the amount of national insurance that working people pay. As a result of our Budget, people will not see a penny more tax on their payslips.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

Is the Minister seriously suggesting that, with the best brains in the Treasury on hand, he does not understand that it is a moot point whether someone has a higher national insurance contribution in their payslip, or whether their wages are suppressed and the job that they were going for is not there anymore, because the employer cannot afford to increase their payroll due to this national insurance increase?

[James Murray]

We recognise that we are asking businesses to contribute more, and that this will have impacts, but it will be up to individual businesses to decide how to respond to these changes. The one thing that we know for certain is that if we had chosen a different path—if we had followed the previous Government and increased income tax or national insurance—that would have led to a tax on people’s payslips. It would have led to the amount of money in people’s pockets going down, which would have broken our manifesto promise.

[Imran Hussain (Bradford East) (Ind)]

I apologise for intervening so early in the debate, but a number of my small businesses, charities and voluntary sector organisations have raised concerns and asked for clarity. Can the Minister outline what safety nets and other measures for support are available to small businesses, charities and voluntary sector organisations?

[James Murray]

I thank my hon. Friend for his question. I will get to the detail of the Bill in a moment, but I can briefly reassure him that the Bill doubles the employment allowance, which will go from £5,000 to £10,500. That means that small businesses and charities are protected; they can employ up to four people on the national living wage without paying a penny in national insurance. In the context of the tough decisions that we had to take in this Bill, that is important protection for small businesses and charities.

[Wendy Morton (Aldridge-Brownhills) (Con)]

Does the hon. Gentleman not accept that in the UK, the definition of a small business is one that employs fewer than 50 employees and has an annual turnover of less than £10 million? Thanks to his changes and political choices, thousands of small businesses across the country will face the decision of whether to keep staff on or lay them off.

[James Murray]

We know that the tough decision that we have had to take will have impacts—we have been up front with people about that—but we also know that over half of all employers will pay no more or less national insurance than they did before. We acknowledge that this decision will have an impact, but we believe that it is the right decision. I will explain why that is.

[Ms Stella Creasy (Walthamstow) (Lab/Co-op)]

It is clear that the Government are working hard to get this right, but may I press the Minister on the point about the employment allowance? What he says about doubling the threshold is welcome, particularly when it comes to childcare provision, and we all want an expansion of childcare places. He will be aware that the employment allowance doubling that he is talking about will apply to state-provided childcare places, but not to private and co-operative nurseries. Some 85% of places are in private and co-operative nurseries, so will he look at extending the employment allowance that he is giving to state nurseries to private and co-operative nurseries, so we can support the expansion of childcare?

[James Murray]

I thank my hon. Friend for her question, but eligibility for the employment allowance is not changing. It is the same as it was before, and we are maintaining that provision. On protecting small businesses and charities, the crucial thing for us is the doubling of the employment allowance. In individual cases, I would recommend that organisations get the right advice, but the eligibility criteria for the employment allowance will not change as a result of the Bill.

[Sammy Wilson (East Antrim) (DUP)]

Will the Minister give way?

[James Murray]

I will, one more time, and then I will make progress.

[Sammy Wilson]

Is not the fact of the matter, despite what the Chancellor has said, that businesses have been abandoned? There is no safety net for them. To use the words of the Chancellor,

“What we have done with the increase in employer national insurance is leave it to the business to work out”.

Businesses are bearing the brunt of this, and it is really too bad. As far as the Chancellor is concerned, they will have to grin and bear it.

[James Murray]

I am sorry, but there are tough decisions that we have to take, and there are difficult decisions that businesses will have to take. The only people to have abandoned businesses were the Conservatives when they were in government. They abandoned any pretence of economic stability, fiscal responsibility, and supporting businesses to invest and grow. That is the difference between the Opposition and the Government.

[Several hon. Members rose—]

[James Murray]

I will make some progress, and take more interventions shortly. For me, keeping the promises on income tax, employee national insurance and VAT is crucial, but making those decisions and needing to get our country back on track has meant that other tough decisions in the tax system have been necessary. That is why, at the Budget, we took the decision to increase national insurance contributions from employers, while, as I mentioned to my hon. Friend the Member for Bradford East (Imran Hussain), increasing protections for small businesses and charities. It is those measures that the Bill seeks to introduce.

I will set out the detail of how the Bill seeks to achieve that. First, it increases the main rate of employer secondary class 1 national insurance contributions from 13.8% to 15%. It decreases the secondary threshold for employers—the threshold above which employers begin to pay employer national insurance contributions on their employees’ salary—from £9,100 to £5,000. At the same time, as I have mentioned to hon. Members, the Bill increases the protection for small businesses by more than doubling the employment allowance from £5,000 to £10,500. That increase in the employment allowance, alongside the removal of the £100,000 eligibility threshold, means that all eligible businesses will be able to employ four full-time workers on the national living wage without paying any national insurance contributions.

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

Is the Minister aware of the complete disaster this will cause for Scottish hospitality businesses? We do not have business rates relief, as businesses do in England Wales. We have a very large number of young people in the hospitality sector. For example, for someone working part-time for 25 hours a week on the minimum wage, their salary is £15,912, and the national insurance has just gone up by 74%. This is wiping out the hospitality industry in Scotland.

[James Murray]

I recognise that the decision we are taking will have impacts, and in some cases it will mean that employers have to take difficult decisions. We are, however, reforming business rates to help retail, hospitality and leisure on the high street, so I would suggest that the hon. Member speaks to the Scottish Government about their doing something to support businesses in the same way; I cannot speak on their behalf.

Taken together, the measures, should the Bill pass, will mean that 865,000 employers pay no national insurance at all next year, with over 1 million—more than a half of all employers—paying the same or less than they did previously. I have been clear, however, that I recognise that there will be impacts on some employers as a result of the changes. While many small businesses and charities will be protected through the employment allowance increase, others will have to contribute more.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

The Minister talks about protecting businesses or charities, but hospices, for example, employ many more than four people. I cannot think of one hospice that does not employ more than four people. How will they be protected?

[James Murray]

I thank the hon. Gentleman for his question. That will depend on the exact set-up of the hospice, but typically hospices are independent charities, so they will be able to use the employment allowance against their national insurance contributions liability. They will also be able to access the other tax reliefs in the system that benefit charities, such as business tax relief and gift aid relief, which we have maintained in the Budget. We have taken the decision to maintain—

[Clive Lewis (Norwich South) (Lab)]

rose—

[Wendy Morton]

rose—

[James Murray]

Members will have to wait a second so that I can answer this question.

We will maintain the charitable reliefs in the system, such as business tax relief and gift aid relief. However, it is important to recognise that the decisions we have taken overall mean that over half of all employers will not pay any more or will pay the same national insurance as they did before. Their national insurance bill will be the same or less than it would have been otherwise.

[Clive Lewis]

Many of us in this House appreciate the work that my hon. Friend’s team are doing to unpick the mess we inherited, but one thing that has been pointed out is the need for better targeting. I have been talking to social enterprises and small businesses in my constituency. Social enterprises often do things that charities may do, but are considered as small businesses, although they do not get the same tax reliefs as charities. They also provide critical services in my constituency and in constituencies around the country. Is there not a better way to target micro-businesses and social enterprises to enable them to better manage what is quite a tough Budget for some of them?

[James Murray]

We recognise that tough decisions had to be taken throughout this Budget, but that is exactly why we have balanced the difficult decisions on the rate of national insurance and the decrease in the secondary threshold with the increase of the employment allowance, which helps small businesses and charities. There is no way that we can get through the measures announced in the Budget, and say that there will not be any difficult decisions for organisations or businesses to have to take. We are being up front about this. It is a tough decision for the Government to have to take, and it will mean that businesses must take difficult decisions as well. However, it is essential that we do this to fix the public finances, get our public services back on their feet and restore the economic stability that was squandered by the Conservative party.

[Christine Jardine (Edinburgh West) (LD)]

How does it help morale and positivity among small businesses, which will be vital to economic growth, if some of them are going to see their salary bills double? An employer in my constituency—not quite a small business, but a medium-sized business—is facing crippling increases in the salary bill. How will it help growth if those companies go to the wall and we lose jobs?

[James Murray]

The hon. Member focuses on the national insurance contributions changes, which is rightly the focus of this Bill, but I urge her to look at that in the context of everything else the Government are doing, not least the employment allowance doubling that I have mentioned. There is also our decision to freeze the small business rates multiplier as it applies in England, our decision to introduce permanently lower retail hospitality and leisure rates for businesses on the high street in 2026-27, and the decision in our corporation tax road map to maintain the small profits rate and other allowances from which small businesses can benefit. I urge her to understand that what we are doing on national insurance is taking a tough decision to fix the public finances, while at the same time providing the stability that businesses need to invest and grow, and that is the way to move our country forward.

[Tom Hayes (Bournemouth East) (Lab)]

Does the Minister agree that many people who want to work have struggled to do so because of poor health? They are unable to get access to a doctor, a hospital appointment or a dentist appointment—to a whole range of appointments—and as a consequence they have been forced out of work when they want to be in work, earn a living and get dignity from work. With the changes that the Government are bringing forward, we will see investment in our NHS and our public services that will help people to get the appointments they need to return to work. Does he agree that this investment is much needed and a good thing for our economy?

[James Murray]

I thank my hon. Friend for his intervention, and he is right. He points out why we are taking these difficult decisions, and why it is so important to fund public services and fix the public finances. Healthy businesses need a healthy NHS, healthy businesses need a healthy workforce and healthy businesses need public services to be functioning so that they can maintain their investment and grow the economy. I am sure that my hon. Friend, and other Members, will have seen the Government’s “Get Britain Working” White Paper, which sets out the barriers that ill health puts in the way of people being economically active. We are determined to challenge that and to help people who are able to get back into, and stay in, work. That will be a mission of this Government.

[Several hon. Members rose—]

[James Murray]

I will make a bit of progress; I have been generous in giving way.

The choice that we have taken is difficult; it is not one that we have taken lightly. As I have fully acknowledged in the Chamber, the impacts of this measure will be felt beyond businesses, as the Office for Budget Responsibility has acknowledged. Let me put the decision in context and say what we could have done instead. We could have reversed the previous Government’s cuts to employee national insurance. Those cuts were simply not honest because they were based on a forecast that the OBR said would have been “materially different” if the true extent of the last Government’s cover-up had been known. We made a commitment to not increase the taxes that working people pay, and we have delivered on that promise and made a different choice.

[Sir Desmond Swayne (New Forest West) (Con)]

rose—

[James Murray]

I will give way; I am being too generous I think.

[Sir Desmond Swayne]

The manifesto said that Labour would not increase rates of national insurance contributions. The Minister is perfectly entitled to use the argument, “We never realised that it was this bad, so we have had to change what we said we would do”, but to pretend that Labour has not resiled on its manifesto promise is pure sophistry.

[James Murray]

In fact, it is both things: it is true that we have kept to our manifesto pledge of protecting working people by not increasing income tax, the national insurance that working people pay or VAT; at the same time, the situation is far worse than we thought it would be when we won the general election, with the £22 billion black hole and the fact that the OBR said that its forecast would have been “materially different” in March, had it known the true extent of the previous Government’s cover-up. Those are facts that the OBR put out there and from which we cannot hide.

[Stuart Anderson (South Shropshire) (Con)]

I believe the Minister is misleading the House—[Interruption.] Inadvertently. The OBR did not say the words “cover-up” so will he correct the record?

[James Murray]

I said that the OBR said that its forecast would have been “materially different” had it known what the previous Government did not share with it at the time of its March forecast. I have been absolutely clear, and I suggest that the hon. Gentleman reads the OBR forecast as it might be illuminating—

[Stuart Anderson]

rose—

[James Murray]

No, I will not give way again. It might be illuminating for him to read the OBR forecast and understand what it says about the previous Government’s relationship with it, how much information was not shared, and how that impacted on its forecast going into the election.

[Several hon. Members rose—]

[James Murray]

I will make some progress as I want to explain why we are taking this tough decision, and why it is so important that we take this decision now, as set out by the Chancellor in the Budget. Revenue raised by measures in the Bill will play a critical role in enabling the Government to fix the public finances, restore economic stability in a fiscally responsible way, and get the NHS back on its feet.

[Pippa Heylings (South Cambridgeshire) (LD)]

Will the Minister give way?

[James Murray]

I will make some progress.

We know how crucial economic stability is for businesses taking investment decisions, and as I said to my hon. Friend the Member for Bournemouth East (Tom Hayes), we know how crucial it is for businesses to have a healthy NHS. As a result of measures in the Bill, as well as wider measures announced in the Budget, the NHS will receive an extra £22.6 billion increase in resource spending to deliver 40,000 extra elective appointments a week. That is urgently needed to get the NHS back on its feet. The increase in funding will be done within our tough fiscal rules—new rules that will bring an end to borrowing for day-to-day spending, something that the previous Government never achieved or even aimed for.

[Wendy Morton]

The hon. Gentleman refers to the NHS, and I believe the NHS and hospital trusts will receive an exemption to the increase in national insurance contributions. Given his clear passion for the NHS, will he look again at the impact that his rise in national insurance contributions will have on air ambulances? Under the current proposals air ambulances, like hospices, will face a huge increase in their costs.

[James Murray]

The way that we are approaching the reimbursement of employer national insurance costs for Departments and public sector employees is similar to what the previous Government did with the health and social care levy. It means that money goes to Departments, local governments, and public sector employees directly to help compensate for the increase in employer national insurance. For other people who are paying employer national insurance, if they have a contract with the public sector they are treated as contractors or private organisations. If they have concerns about their cost base they should talk to their sponsoring Department, the NHS, or whoever they have a contract with, so that those considerations can be taken into account in the round. It was the same for adult social care, and it is the same for other organisations that are funded through the public sector.

[Munira Wilson (Twickenham) (LD)]

Let me pick up on the point about local authorities and public services. I pressed the Minister on that this morning during Treasury questions, and I fear he did not give me a clear answer. Richmond council, my local authority, delivers children’s services through an arm’s length body called Achieving for Children. As a result of these measures, with all the employees who deliver services for vulnerable children in Richmond upon Thames, it faces a bill of £588,000 in employer’s national insurance. Will the Minister assure local authorities up and down the country that operate similar models for delivering services that these arm’s length bodies will be exempt from the national insurance rise? Otherwise he will be damaging the very public services that he claims to be investing in today.

[James Murray]

We are protecting public services by providing relief directly to Departments and other public sector employers. Third parties, private organisations, or those who have a contract with the public sector are dealt with differently and they should approach their local council, or whoever is sponsoring them, to talk about their funding arrangements. I might draw the hon. Lady’s attention to the fact that local government financing is increasing by 3.2% next year as a result of decisions that this Government have taken. I expect she would probably support that increase in funding, but sadly she does not have the guts to support what we need to do to raise the money in the first place.

[Damian Hinds (East Hampshire) (Con)]

On the £22.6 billion for the NHS, or the figure just mentioned for local government, have the Minister or his officials calculated what the numbers would be, net of the national insurance cost? Those bodies— the national health service and local government—carry on with exactly the same services as before, but now face extra bills for national insurance contributions. Have they done the maths?

--- Later in debate ---

[James Murray]

In the statistics put out by the Government at the time of the Budget, a specific amount is earmarked directly for Departments and public sector employers. That amount is effectively netted off against the amount that will be available for net spending in public services. For other organisations, such as third parties that contract with the NHS, there should be a conversation between the person under the contract and the contracting organisation to consider pressures in the round. As I said, this is in the context of, for example, the local government budget going up by 3.2% next year, and a huge amount of extra investment in the NHS, with £600 million going to local authorities in England to help deal with social care pressures. That is the context of the decisions that we had to take and pressures in the round.

[Christine Jardine]

I thank the Minister for giving way again. What about GP surgeries?

[James Murray]

GP funding for 2025-26 will be confirmed by the Department for Health and Social Care in the usual way as part of the GP contracting process, and it will consider all the pressures on GPs in the round.

I will make some progress, because the points we have made are clear. It is important for me to look also at what the Opposition might do, given the important vote today on these tax changes, which are necessary to raise funding for the NHS and other public services. I would like to think that the Opposition might join us today, back our plans to provide extra funding for the NHS and support this Bill to help pay for it. It seems though, from an article in The Sunday Times in the name of the shadow Chancellor, the right hon. Member for Central Devon (Mel Stride), that that may not be the case. In that piece, he wrote that the Conservatives apparently

“want to provide further funding for the NHS.”

Sadly, they refuse to take the tough decisions to pay for it.

I note that in that article, the shadow Chancellor rehashed the discredited pledge from the recent Conservative manifesto to make £12 billion of welfare savings, which the Institute for Fiscal Studies politely described at the time as being “difficult in the extreme.” Perhaps he missed the admission from his predecessor, the right hon. Member for Godalming and Ash (Jeremy Hunt), during the election campaign that those welfare cuts were in fact not new, and the money had already been spent. Either way, it is hard to fathom why the new shadow Chancellor would rest his first intervention on a pledge from a manifesto that led to his party losing nearly 250 seats. It only serves to underscore the fact that the Conservatives are getting further and further away from being a credible Opposition by the day.

We recognise that the decision to increase employer’s national insurance will have impacts. Although measures in this Bill will help to protect small businesses and charities, other measures mean that larger businesses and organisations will have difficult decisions to take. Let me be clear, however: the Budget was a one-off and a once-in-a-generation event. The difficult decisions we took meant that we were able to wipe the slate clean of the previous Government’s fiscal irresponsibility and economic mismanagement. Public services now need to live within their means and the means we have set them for the rest of this Parliament. The Budget delivered stability and fiscal responsibility, meaning that our focus can now be resolutely on boosting investment and growing the economy. That fiscal responsibility is possible only when we take tough decisions. This Bill makes it clear that this Government will not shy away from tough decisions and that we will do what is right in the circumstances we face. I commend it to the House.

--- Later in debate ---

[Richard Fuller]

To be fair, my former colleague did not last quite as long as the lettuce, and the public made their judgment clear on that and many other issues at the general election. The hon. Gentleman’s point is fair, but it is not particularly relevant to the decisions he will be asked to vote on today. Hospices in his constituency will know how he votes. GPs in his constituency will know how he votes. Charities in his constituency will know how he votes. I will be interested to see whether he votes with his conscience or with the party line.

Less than one in four of the public now believe that the Government are handling the economy well. It is not just the public who have lost faith in the economic competence of His Majesty’s Treasury; it is the Prime Minister himself, who apparently on Thursday will ditch the ambition for the United Kingdom to be the fastest-growing economy in the G7, removing at a stroke one of the key planks of Labour’s economic plans. The Bill will add to that lack of faith in this Labour Government, because this measure to raise national insurance contributions directly contradicts Labour’s election promise not to increase taxes on working people.

In the election campaign, the Prime Minister, the Chancellor and the entire Labour Treasury team, including the Minister, repeated the phrase from their manifesto, which stated:

“Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.”

Yet today, with the election behind them, increasing taxes on working people is exactly what Labour is proposing to do.

The shadow Minister is shaking his head.

[The Economic Secretary to the Treasury (Tulip Siddiq)]

You’re the shadow Minister.

[Richard Fuller]

I am terribly sorry—the Minister. He shakes his head and says that it is not true. Let me turn to one of his favourite independent economic groups, the Resolution Foundation, whose analyst James Smith said, “Even if it”—the employers national insurance change—

“doesn’t show up in pay packets from day one, it will eventually feed through to lower wages…This is definitely is a tax on working people, let’s be very clear about that.”

--- Later in debate ---

[The Economic Secretary to the Treasury (Tulip Siddiq)]

It is an honour to close the debate on behalf of the Government. When the hon. Member for Grantham and Bourne (Gareth Davies) loses his seat, he can work as my speechwriter, because he is right that I am going to say all the things he said, but I will come on to that soon.

Let me start by thanking hon. Members for their contributions to the debate. There were some powerful speeches, including from my hon. Friends the Members for Chipping Barnet (Dan Tomlinson), for Bournemouth East (Tom Hayes), for Leeds South West and Morley (Mr Sewards), for Gateshead Central and Whickham (Mark Ferguson), for Dartford (Jim Dickson), for Welwyn Hatfield (Andrew Lewin), for East Thanet (Ms Billington), for Rochdale (Paul Waugh), for Loughborough (Dr Sandher), for Basingstoke (Luke Murphy) and for Reading West and Mid Berkshire (Olivia Bailey). .

Before I come to the specific points raised in this debate, I want to reiterate the purpose of the Bill. Our priority in the Bill is to restore stability to our economy, repair the public finances to fix our economy, and support long-term economic growth. The Chancellor recognised that to do that, the Government needed to make difficult decisions. That is why under the measures in the Bill, employers are being asked to contribute more. First, the Bill provides for a rise in the rate of employer secondary class 1 national insurance contributions from 13.8% to 15%. Secondly, it provides for a decrease in the secondary threshold for employers from £9,000 per employee to £5,000. Thirdly, it provides for changes to the employment allowance, to increase it from £5,000 to £10,500, and removes the £100,000 eligibility cap, so that the vast majority of employers benefit.

The hon. Member for North Bedfordshire (Richard Fuller) asked at the start of the debate where the extra money raised will go. Let me remind him that the Government uncovered a challenging fiscal and spending inheritance with £22 million of in-year pressure on public finances. We have taken difficult but necessary decisions to fix the foundations of our economy and to fix public services. The Budget provided additional day-to-day funding to stabilise and support public services. Day-to-day funding will now grow at an average of 3.3% in real terms over this year and next, compared to 0.2% under the last Government’s plans.

[Dave Doogan]

A £200 million black hole in the Scottish Government’s core finances, rising to £450 million when partner agencies are included—what kind of stability does the Minister think that will bring to public services in Scotland?

[Tulip Siddiq]

If the hon. Gentleman is patient and listens carefully to my speech, I will come on to the Scottish Government, so he does not need to worry.

The increase in employment NICs raises revenues for the NHS and increases funding for contributory benefits such as the state pension, easing wider pressures on public finances. It is part of the Government’s announcement of an additional £22.6 billion of day-to-day spending over two years for the Department of Health and Social Care, including the NHS.

[Bradley Thomas]

Can the Minister tell the House which decision was harder, giving an inflation-busting pay rise to union paymasters or cutting the winter fuel payment?

[Tulip Siddiq]

The best decision that we have ever made in government is putting money back into the pockets of working people.

Questions were raised by the hon. Member for Isle of Wight East (Joe Robertson), the hon. Member for Yeovil (Adam Dance) and the Liberal Democrat spokeswoman, the hon. Member for St Albans (Daisy Cooper). The hon. Lady asked a number of questions about the NHS. The Government will provide support for Departments and other public sector employers for additional ER NICs costs only. That will apply to central Government, public corporations and local government. Primary care providers—GPs, dentists, pharmacies and eyecare provider—are valued independent contractors who provide nearly £20 billion worth of NHS services. Every year we consult each sector both about what services they provide and about the money to which providers are entitled in return under their contracts. As in previous years, this issue will be dealt with as part of that process.

[Daisy Cooper]

I am grateful to the Minister for addressing my earlier questions. Rather than taking with one hand and giving back with the other, would the Minister support moves to exempt all health and care providers?

[Tulip Siddiq]

The Department of Health and Social Care will confirm funding for general practice for 2025-26 as part of the usual GP contract process later in the year, through consultation with the sector. I understand the concerns about the impact on the healthcare sector, but I can assure the hon. Lady that the Department of Health will continue to engage with GPs, dentists and pharmacists as part of the usual contract process, and that changes in NICs will be taken into account in those discussions.

Let me now turn to the rant, I would say, rather than speech, from the hon. Member for South Shropshire (Stuart Anderson). I was not quite sure what question he was getting to, but he did ask very clearly whether the Chancellor understood the impact of the economic policies that she was making, and whether she would remain in her place. Considering those questions, I wondered what he thought about economics as a whole, so I decided to look into him. Not long ago, he said:

“I have worked with Liz Truss on many occasions…I believe that her economic position…and her parliamentary experience make her the best option to lead our country.”

[Stuart Anderson]

Will the Minister give way?

[Tulip Siddiq]

With pleasure.

[Stuart Anderson]

I stand by the comments that I made. [Interruption.] I do. I fundamentally believe that Liz Truss would be a better Prime Minister than the one we have now.

[Tulip Siddiq]

If you will forgive me, Madam Deputy Speaker, I feel that a lettuce would have better judgment.

I turn to the devolved Governments. The Government will provide Departments and other public sector employers with support for additional ER NICs costs only. The funding will be allocated to Departments, with the Barnett formula applying in the usual way. The overall outcome of the Barnett formula is that all the devolved Governments will receive at least 20% more funding per person than the equivalent UK Government spending in the rest of the UK. The Scottish Government will receive £47.7 billion in 2025-26, including an additional £3.4 billion through the operation of the Barnett formula. The Welsh Government will receive £21 billion in 2025-26, including an additional £1.7 billion through the operation of the Barnett formula.

[Dave Doogan]

The Minister is being very generous in taking a second intervention from me. I realise that the bar for credibility in the Treasury is very low right now, but she hoots and toots about the level of the block grant for the Scottish Government. In what universe does the block grant go down year on year? Of course it is higher than in previous years. Has she got the faintest idea how it works?

[Tulip Siddiq]

I do have the faintest idea how it works, which is why I am on this side of the House and the hon. Gentleman is on that side. That is why I am a Treasury Minister and he is not, and probably never will be.

The hon. Member for Huntingdon (Ben Obese-Jecty) spoke about hospitality. Without any Government intervention, retail, hospitality and leisure relief would have ended entirely in April 2025, creating a cliff edge for business. [Interruption.] I know the truth hurts, which is why the hon. Member for Thirsk and Malton (Kevin Hollinrake) is chuntering from the Opposition Front Bench. Our Government have decided to offer a 40% discount to RHL properties by introducing a cash cap of £110,000 per business in 2025-26, and we have frozen the small business multiplier. This package is worth over £1.6 billion in 2025-26 and is aimed at supporting the most vulnerable businesses, ensuring that over 250,000 RHL properties receive the full 40% support.

[Graham Stuart]

Will the Minister give way?

[Tulip Siddiq]

I am reluctant to do so, but I will.

[Graham Stuart]

I thank the Minister for giving way. The OBR had to issue a correction to table 3.2 in chapter 3 of its report. Originally, there was RDEL compensation for public sector employees and for adult social care. The correction was made to reduce the sums by £800 million, typically per year, for RDEL compensation just for public sector organisations. Why did the correction need to be made, when was it made, and why was the OBR told so late that social care was not getting the support that it clearly needs?

[Tulip Siddiq]

As far as I am concerned, the current numbers are the correct ones.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The Minister mentions business rates and the small business multiplier. Will she confirm the continuation of small business rates relief for the rest of this Parliament?

[Tulip Siddiq]

That is under review, and we will come back to the hon. Gentleman soon.

I turn to the questions from the hon. Member for Eastleigh (Liz Jarvis) about childcare providers. She may be aware that I served on the shadow Education team for a long time. I realise the value of early years providers, and I know that they drive economic growth and break down barriers to opportunity. We have committed to making childcare more affordable and more accessible, which is why we promised in our manifesto to deliver the expansion of Government-funded childcare for working parents, and to open 3,000 new or expanded nurseries by upgrading space in primary schools to support the expansion of the sector. However, I say to the hon. Member that the Government inherited the worst economic circumstances since the second world war, and our first step must be to fix the foundations of our economy. In spite of the challenges, the Chancellor announced in her Budget significant increases to the funding that early years providers are paid to deliver Government-funded childcare places, meaning that the total funding will rise to over £8 billion in 2025-26.

I am grateful to have had this opportunity to respond to the questions that have been raised today. I also want to thank my officials for their work on bringing the Bill to the House. Before I finish, however, I want to answer a question that the right hon. Member for East Hampshire (Damian Hinds) asked in his speech: what is the mission of this Government? Well, let me tell him. This Government’s mission is economic stability, restoring our public services, a thriving workplace, making sure that we have a strong education system and strong public services, putting more money in working people’s pockets, and fixing the foundations of our economy. The mission is to rebuild Britain. The Conservatives left a mess, and we will do a better job than them. I commend the Bill to the House.

Question put, That the amendment be made.

--- Later in debate ---

18:40

Division 53

Ayes: 186

Noes: 330

Question put forthwith (Standing Order No. 62(2)), That the Bill be now read a Second time.

--- Later in debate ---

18:54

Division 54

Ayes: 332

Noes: 189

Bill read a Second time.