Employer National Insurance Contributions: Police Forces

Tuesday 11th February 2025 Westminster Hall

16:30

[Esther McVey (Tatton) (Con)]

I beg to move,

That this House has considered the impact of planned changes to employer national insurance contributions on police forces.

It is a pleasure to serve under your chairmanship, Dr Allin-Khan, and I am grateful for the opportunity to speak on this important issue. I rise to address a matter of significant concern that will affect police forces in my constituency and across the country.

Hon. Members will be aware of the broader tax and fiscal challenges presented by the Government in the autumn Budget, including changes to the agricultural property relief and the cruel cutting of the winter fuel payment, which have been rightly widely condemned, and to which I have objected many times in this House. In fact, this room was jam-packed last night with hon. Members from across the House condemning the Government’s family farm tax. People sat on the ledges here trying to speak—some were not able to—such was the feeling against some of the disastrous consequences of the Budget.

[John Slinger (Rugby) (Lab)]

Will the right hon. Lady give way?

[Esther McVey]

I will not just yet. Please allow me to make the case, and then I will come back to the hon. Gentleman. We know about the removal of the winter fuel payment from nearly 10 million pensioners, we know about the family farm tax and we know about the VAT on private schools. All have received much attention in this House, but we must not overlook the breadth of the ramifications of the autumn Budget, particularly the changes to employer national insurance contributions. They will have a devastating impact on individual employers and businesses, but their impact on our treasured public services has been widely overlooked. I want to focus my comments on the impact on our police forces.

You will be wondering, Dr Allin-Khan, how the Member for Tatton knows what is going to happen here. Did the Treasury conduct an impact assessment? Did the Chancellor generously share the assessment with Members from across the House? Were police forces consulted on such changes? The answer to all those questions is no, as is often the case with the Government’s policy announcements.

Late last year, I submitted freedom of information requests to every police force in the UK, asking for the expected additional costs that each will incur as a result of the Chancellor’s hike in employer national insurance contributions. I was shocked, yet unsurprised, to learn of the devastating impact that the policy will have on our police forces. In my county of Cheshire, the local constabulary will face an additional £3.7 million per year in employer national insurance costs.

[Aphra Brandreth (Chester South and Eddisbury) (Con)]

I thank my right hon. Friend for giving way and for securing this debate. She is making an excellent speech, as always. She and I are both Cheshire MPs, and we are fortunate to work with the Cheshire constabulary, one of the best forces in the country. Like me, however, she will know the challenges that Cheshire police face with rural crime. It is estimated that the changes to employer national insurance contributions will cost the force £3.7 million. Does she share my concern that that could have a significant impact on rural crime, in particular, especially if cuts are made or funding is diverted away from rural into urban areas?

[Esther McVey]

My hon. Friend and neighbouring MP makes a valid point; £3.7 million is the equivalent of about 67 police officers. That is a recurring expense, not a one-off. In places such as Devon and Cornwall, the police will face a £6.3 million tax bill each year. Greater Manchester will be hit with a whopping extra tax bill of £11.9 million each year. Those are just a few examples, and the list goes on.

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

The estimated cost for the west midlands is in the region of £12.8 million, which is a huge amount of money. What this Government do not seem to understand is that when the pressure of national insurance is put on to businesses, people cannot squeeze and squeeze profit margins; in the end, that will impact employment, training, and so on. When it comes to the public sector, if we keep squeezing and squeezing, the money has to come from somewhere. Does that mean reduced public services—fewer police officers, as in this case—or will the burden come back on the taxpayer?

[Esther McVey]

My right hon. Friend might have hit on a point, as the burden could well come back to the taxpayer. Remember that this is tax—it is money that will be going on tax, and a bill that the Government are imposing. However we look at it, it is money that the frontline police service are being deprived of. Let us consider the financial burden that the changes will place on the police force. Employer national insurance contributions represent a significant cost for everyone, but they will hit the police especially hard. For police forces that employ a number of police officers and staff to protect our communities, the cumulative cost of the increase will run well into the tens of millions of pounds. To put that into perspective, take West Yorkshire, where the figure of £11.2 million per year is the equivalent of 220 police officers. That is potentially 220 fewer police officers keeping our communities safe as a direct result of the Government’s Budget.

Let me name a few other places, such as my home area of Merseyside—[Hon. Members: “Hear, hear!”]—Thank you very much indeed. It will be paying an extra tax bill every year of £7 million, which is roughly 130 police officers. Kent will be paying more than £6 million, which is about 100 police officers a year, and Thames Valley police will face an £8 million tax bill every year.

[John Slinger]

The right hon. Lady is making an entertaining speech, as is often the case. In the midst of all those words about tax, I merely point out the Conservative party’s two unfunded national insurance tax cuts and the £22 billion black hole that is based on unfunded spending pledges and kicking the can down the road. What is her suggestion for filling that devastating black hole, which affects our constituents? Is it more austerity, an increase in borrowing or other tax rises? Ultimately, this Government, like any Government, have to deal with the crisis that is a £22 billion black hole.

[Esther McVey]

I think I need to pull the hon. Gentleman up straight away. This is not in any way an entertaining speech—indeed, I would put this down as a horror speech. This is a disgrace of monumental proportions, so the word “entertaining” was used absolutely incorrectly.

Let me talk about the choices that different Governments have made, and where money could have been saved. One example is GB Energy, which the new Government thought they could find money for. They could not find money for the pensioners or the farmers—this Government are giving away half a billion pounds a year to farmers overseas, but they cannot find that half a billion pounds here. We would stop money being spent on things like GB Energy, which does not produce any energy; it seems to me like another quango that will cost money. We would not have increased foreign aid, and I can tell Members one thing that we would not have done: we would not have capitulated to the rail unions, finding money for the railway workers without any modernisation whatsoever. There is a big list of things that we would not have been paying for.

[John Slinger]

Will the right hon. Lady give way?

[Esther McVey]

I will not take another intervention, because I cannot quite get over the word “entertaining” being used about such a devastating policy, which will have devastating impacts on the streets of all our communities. There is a real risk that police forces will have to scale back on recruitment—that is not entertaining. There is a real risk that they will have to cut back on vital training—that is not entertaining—or reduce operational spending in other areas, which again is not entertaining. These decisions could have serious consequences for the police service’s ability to deliver an effective police force. The planned national insurance increases will make it harder for police forces to recruit new officers, particularly in areas where the cost of living is already high. The Government have committed to recruiting more officers, yet those efforts will be undermined by these fiscal pressures through taxation.

A common theme of this Government is their lack of foresight. They failed to consult with Back Benchers, public services and Government Departments before steamrolling ahead with this policy. They failed to understand the impact of the rise in employer national insurance costs on our public services, a mistake so basic that it is sometimes hard to comprehend. I think we all remember the immediate outcry that we heard from GPs, charities, social care providers and hospices. I remember being in the main Chamber when the Secretary of State for Health came to the Dispatch Box to answer questions on this policy, and he was taken aback. He did not know how to answer those questions, and his plea to the Chancellor at the time was, “Where are we going to get that extra money? I hope I will get that extra money, and I will come back to Members later with answers.”

[Joe Robertson (Isle of Wight East) (Con)]

Does my right hon. Friend agree that the Government must know that this policy is damaging the ability of the police to operate? The Government know it is causing damage to the public sector, and that is why they have exempted the NHS, but they have failed to exempt other public sector services such as the police. They cannot pretend that this policy is not causing damage.

[Esther McVey]

My hon. Friend is correct. That is why I highlighted the cost implications of the policy to the Secretary of State for Health that day on the Floor of the House, and he was absolutely taken aback. There was muttering among the Government Front Benchers, and the Government put in a solution straight away, but they overlooked the police. Later in my speech, I will come on to the fact that the Government now think they will put money into this area.

Fewer police will inevitably have broader consequences for public safety. Police officers are on the frontlines, tackling serious and organised crime, addressing domestic violence and responding to emergencies. Every officer we lose or fail to recruit means less protection for communities such as Tatton. To give an example, in Cheshire there has been a significant rise in serious sexual assaults by people who are in this country illegally. Money that should have gone into supporting our police force to halt that crime will not be there, which is making our streets less safe.

This Government are fiscally illiterate. They made a £25 billion grab in employer national insurance contributions at the Budget, without really thinking where that money would come from. Remember, the Government said that they did not want to tax working people, yet we know this will hit working people—the Government never thought where that money would come from. Instead, the measure was born from ideological reasons, whether that meant funding the Government’s net zero obsession, foreign aid or their union paymasters. In introducing the change, the Government have failed to consider the most basic duty of any Government: to protect their citizens.

[John Slinger]

On that point, will the right hon. Lady give way?

[Esther McVey]

I am afraid I will not.

I understand that the Government say that they will pick up the £230 million tab, but that still means that the Government will be paying a tax bill rather than having money to spend on frontline police. Last month, we heard the Home Secretary announce a £200 million boost to neighbourhood policing to fund the recruitment of 13,000 new neighbourhood police officers, as the Government said before the election, although they had been very quiet on that for a long period of time.

I wonder whether the Government can do that. The numbers are very similar: £200 million for 13,000 new neighbourhood police officers, yet they have given themselves a £230 million a year tax bill. Will those 13,000 neighbourhood police officers ever materialise? In her summing up, will the Minister say what will happen, particularly in light of the national insurance contribution black hole, as those national insurance contributions are to be paid year in, year out? Will the Government pay for those police officers, year in, year out? If so, what will be the amount paid during a whole Parliament? Where will that money come from?

I urge the Government and the Chancellor, through the Minister, to stop this ill-thought-through, ham-fisted Budget change to employer national insurance contributions. The only solution to the problem—

[Adam Jogee (Newcastle-under-Lyme) (Lab)]

On that point, will the right hon. Lady give way?

[Esther McVey]

Can I finish my sentence? There is only one solution to the problem that will have the correct consequences: scrap the diabolical tax on our police forces.

[Adam Jogee]

I am grateful to the right hon. Lady for giving way. I want to say two quick things. First, my grandmother was born and raised in Birkenhead, so we have some common heritage. Secondly, the right hon. Lady just said that certain Labour Members are driven by ideology, but I want it to be noted that I am driven by a love of country and, in this context, by being tough on crime and on the causes of crime. I thought it was important to provide that clarification for the House.

[Esther McVey]

I thank the hon. Member for saying that. I hope he too shares my delight that Liverpool is top of the football division as well. We all should share a love of this country, and we should all want the best for this country. I too want a safe country, so it is vital that the money goes to the police and the police forces to ensure that happens, and not on increased tax bills. That is why I am asking for this ham-fisted tax increase to be reversed.

16:48

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

It is a pleasure to serve under your chairmanship, Dr Allin-Khan. I am grateful to my right hon. Friend the Member for Tatton (Esther McVey) for securing this important debate. She recently highlighted the significant increase in costs to police forces resulting from the Government’s decision to raise employer national insurance contributions. I begin by expressing my sincere thanks to our local neighbourhood police teams for their dedicated work in supporting citizens and communities across my Aldridge-Brownhills constituency. They protect the public, help tackle crime at the grassroots level, and often go way above and beyond.

Let me turn to the impact of the increased employer national insurance contributions on police forces. Tempting though it is, I will refrain from delving into the decision by the Labour police and crime commissioner to close and sell off the police station in Aldridge. However, I want to make it clear to my constituents that I will continue to stand up for them and for our share of policing resources.

According to HMRC’s impact assessment, the Government’s changes to employer national insurance contributions—I would actually call them choices—will affect approximately 1.2 million employers, which, as we have heard today, includes police authorities. It is my understanding that for the West Midlands specifically, this policy choice—let us remember that that is what it is—will cost a staggering £12.8 million. In my view, that is £12.8 million that should be spent on frontline policing, especially if this Government are genuinely serious about tackling crime. If an average officer’s wage is, say, £35,000, by my calculations that £12.8 million could fund the equivalent of an additional 365 police officers just in one policing authority area alone.

Last week, I raised that issue in the Chamber with the Under-Secretary of State for the Home Department, the hon. Member for Birmingham Yardley (Jess Phillips), particularly because she seemed a little unaware of the cost. I was left unclear about its local impact. I ask the Minister for Policing, Fire and Crime Prevention to confirm whether the funds awarded to police authorities for the upcoming financial year to cover increased national insurance costs will be added to base budgets, or is this a one-off grant? In addition, has the new funding for the 13,000 neighbourhood police officers promised in the Labour party manifesto taken into account the additional burden of national insurance increases from April?

Unlike the constituencies of some of my rural colleagues, my constituency is on the periphery of the west midlands; it is not entirely rural, but it is not exactly urban either. Consequently, we often find ourselves competing for resources with Birmingham and to some extent Walsall. I would be grateful for clarification today on the 13,000 additional officers promised in that Labour party manifesto, with the West Midlands police and crime commissioner saying that they will be funded by a neighbourhood policing grant. Can the Minister confirm how long the Home Office has budgeted for these additional officers, or will individual forces need to precept the ongoing costs? I ask because it is not just this year that we must consider; we must also look to the future.

I will conclude by saying that we need clarity and we need answers. My constituents need reassurance that they will not be left facing the consequences of yet another poorly thought-out Labour policy or broken manifesto promise.

16:52

[John Slinger (Rugby) (Lab)]

Thank you, Dr Allin-Khan, for the opportunity to speak in this very important debate; it is good to have an opportunity to air some of these ideas.

Let me point something out to the right hon. Member for Tatton (Esther McVey). I sought to pay her a compliment about her oratorical style; these issues are not entertaining, of course, but I found her oratory powerful. However, in this instance I think the content is wrong.

The Government have secured a £1.1 billion funding boost for policing. It is a real-terms increase in the settlement on what the previous Conservative Government would have provided of 4.1% in real terms and a cash increase of 6.6%. That is a significant increase in funding and will allow this Government to provide the additional officers and support to our police forces that will enable us to take back control of those streets from the criminals.

I will conclude by saying that law and order is not an issue on which any particular party has a monopoly. Government Members and I think Members from across the entire House care greatly about giving our police officers leadership; I meet rank-and-file officers regularly, as I am sure the right hon. Lady does in her area. We want to support them, and this new Labour Government are supporting them.

16:54

[Ben Maguire (North Cornwall) (LD)]

It is a pleasure to serve under your chairmanship, Dr Allin-Khan. I congratulate the right hon. Member for Tatton (Esther McVey) on securing this important debate. Like the right hon. Member for Aldridge-Brownhills (Wendy Morton), I thank my local police force for all the excellent work it does and its collaboration with me.

For years, thanks to the previous Conservative Government, policing in this country has been underfunded, undermined and increasingly overstretched. The new Labour Government claim that they are putting more money into frontline policing, but the reality on the ground appears completely different. Across the country, forces are battling severe funding pressures. In Devon and Cornwall, the police have been relying on second home council tax increases to plug their financial gaps. The right hon. Member for Tatton pointed out that the increased cost for the Devon and Cornwall force is about £6.3 million. With the rise in employer national insurance contributions, there is a real risk that forces will face yet more impossible choices come April and will have to cut officer numbers or pass the bill on to local taxpayers.

The £230 million allocated in the police grant report is supposed to cover the national insurance rise, but when the broader Budget is examined, the reality is clear. Although the headline figure is £986 million, if we factor in the reliance on council tax precepts, the Government’s so-called increase in police funding is only about £426 million of new cash. That is simply not enough to ensure safe and effective policing across the country. Forces are already stretched to breaking point, and officers are unable to focus on the crimes that matter the most to our communities. According to Home Office figures, 6,000 cases are closed daily without a suspect being identified, and three in every four burglaries and car thefts go unsolved. Yet instead of fixing the underlying problems, the Government are adding new financial burdens on forces, which will inevitably mean fewer officers on our streets.

In rural constituencies such as mine, rural crime is up 4.3% year on year, and criminal gangs are targeting farmyards and villages. The theft of agricultural equipment, including GPS systems, has spiked by 137%, yet just 0.1% of police officers are dedicated to tackling rural crime. For my constituents and those of other hon. Members, that is nothing but shameful. The rise in national insurance will only make the problem worse, forcing already strained rural policing teams to spread their resources even thinner.

The police grant report does not directly mention rural crime once. I fear that tells my constituents and those of other hon. Members representing rural areas everything they need to know about where the Government’s priorities lie.

We need to think bigger. If the Government truly want to invest in frontline policing, they should scrap the failing police and crime commissioner system, which drains millions that could be spent on actual frontline policing. Our Devon and Cornwall PCC is already on her third chief constable and her second deputy police and crime commissioner. We need to fund officers, not office administrators.

Let us not forget the wider impact of the national insurance increase on our public services. The Liberal Democrats opposed the hike from the beginning, calling for GPs, firefighters, hospices, care providers and NHS dentists to be exempt from the rise. Petroc doctors’ surgery in St Columb Major in my North Cornwall constituency told me last Friday that it faces a bill of £180,000 in national insurance rises and increased wages. It is completely counterproductive to increase funding for vital services such as healthcare on the one hand while taxing them more on the other.

The exact same principles apply to the police. If the Government refuse to cancel this damaging rise, at the very least they should exempt policing from the additional costs. For years, forces across the country have struggled to deliver the neighbourhood policing that our communities expect and deserve. The national insurance increase threatens to take yet more money away from those who need it most and will reduce the number of frontline officers and bobbies on the beat.

I conclude by asking the Minister whether the Government will commit to properly funding frontline policing without relying on council tax increases. Will they support my call for a dedicated rural crime taskforce, so that rural communities such as mine are not left behind? If they insist on pushing through this flawed national insurance rise, will they at least protect essential services such as policing from its worst impacts. If we are really serious about making our streets safer, we need more officers on the streets, not the higher costs that risk endangering us all.

17:00

[Matt Vickers (Stockton West) (Con)]

Thank you, Dr Allin-Khan, for chairing this debate. I also thank my right hon. Friend the Member for Tatton (Esther McVey) for securing this important debate, and for all her work in raising awareness of this issue and its consequences.

The last Government recruited 20,000 more police officers, ensuring that there were more police officers on our streets than ever before. Why would anyone think that the solution to any problem would be a tax raid on our police forces? Any MP who has engaged with their PCC or chief constable knows that the funding settlement put forward for local police forces by this Government is entirely inadequate. Just the other week, when questioned by Nick Robinson about the absurd tax raid on local police forces and the fact that the police funding settlement will cut the number of police on our streets, the Minister conceded that she was not going to pretend that it is not challenging for police forces.

Since then, the Government have painted a different picture, understating the impact that this could have on our police forces and on police numbers. At first glance, the settlement may appear generous in cash terms. However, there is a sleight of hand. The Government are claiming to have increased police funding by £1.09 billion, masking their tax raid on our police forces and their failure to build police pay awards into the baseline. The previous Conservative Government provided in-year funding for PCCs to cover the police pay award, adding this to the baseline for subsequent years. By contrast, the in-year adjustment for this year’s pay settlement was not added to the baseline, so about £200 million of the apparent increase this year simply makes up for that omission.

Furthermore, as hon. Members have said, some £230 million of this apparently generous settlement will go straight back to the Treasury to pay for the Government’s national insurance tax raid on our local police forces. The Government are literally taxing the police off our streets. Therefore, about £430 million of this apparently generous increase just makes up for the Government’s choices. Adjusting for that, the increase in funding for policing next year is not £1.09 billion, but more like £660 million, or nearly £300 million less than the last increase under the previous Government. Make no mistake: this tax raid on local police forces, created by our own Government, will have real consequences for communities across England and Wales.

There are estimates that the shortfall in police funding could see 1,800 fewer police on our streets. My force, Cleveland police, has already been placed under special measures, with a recent report from His Majesty’s inspectorate of constabulary and fire and rescue services giving it an inadequate rating for responding to children at risk of harm and for investigating child abuse, neglect and exploitation. It is deeply concerning and entirely unacceptable that vulnerable young people are being let down in such a way. Protecting children should be a priority for the Labour Government and for Cleveland’s Labour police and crime commissioner. These children deserve better. Does the Minister agree that creating a shortfall in funding for a force could lead to more failures in responding to and investigating child abuse, neglect and exploitation in Cleveland?

[Adam Jogee]

The shadow Minister knows I am a reasonable man, and I am not going to engage in partisan games for the fun of it—not all the time, anyway—but I want to draw him back to his use of the word “inadequate” to describe the settlement. Will he confirm that, if he had been the Policing Minister, the settlement would have been higher, and if so, how would that have been paid for?

[Matt Vickers]

As the hon. Member will have seen, in previous years, we were increasing the funding by more. In fact, last year we increased by £300 million more than what Labour is doing this year. We were not raiding our police forces with national insurance tax raids; we were putting the pay award into the baseline. I would be wasting less money on GB Energy. I would not be looking to give train drivers on £55,000 a year a bumper pay rise of almost £10,000, with no efforts to increase productivity. It is about priorities. Policing was a priority for the Conservative Government. That is why 20,000 more police officers were put on the streets, reaching record numbers.

The Government have pointed to their promise to recruit 13,000 new neighbourhood police officers, but we all know that a relatively small number—just 3,000—are new officers. Most of the claimed 13,000 are either reassigned or redeployed, are part-time volunteers or are police community support officers with no powers of arrest. That redeployment is concerning for many. Will the Minister assure MPs that when their constituents ring 999, they will not have to wait longer for an emergency response because response officers have been redeployed to neighbourhoods? Will she guarantee that police numbers will not fall any lower than the current level as a result of her funding settlement?

Given the nature of modern policing and overtime, to what extent did the Government consider the impact of overtime on the increased national insurance cost, and could there be a further shortfall as a result? We owe a huge debt of gratitude to our brave, hard-working police officers, PCSOs and police staff. They deserve resources and support, not tax raids and funding shortfalls.

17:06

[The Minister for Policing, Fire and Crime Prevention (Dame Diana Johnson)]

It is a pleasure to serve under you this afternoon, Dr Allin-Khan. Let me begin by thanking the right hon. Member for Tatton (Esther McVey) for securing this debate. I agree with my hon. Friend the Member for Rugby (John Slinger) about the right hon. Lady’s skills of oratory. I did not agree with what she actually said, but she has a very engaging and enjoyable style of communication. She should take that as a compliment.

I also thank the other hon. Members who have spoken this afternoon: the hon. Member for Chester South and Eddisbury (Aphra Brandreth), another Cheshire MP; the right hon. Member for Aldridge-Brownhills (Wendy Morton), who recognised at the start of her contribution the valuable role of neighbourhood policing in her area; and the hon. Member for Isle of Wight East (Joe Robertson), who intervened. The hon. Member for North Cornwall (Ben Maguire) spoke on behalf of the Liberal Democrats; I was rather intrigued, because I am long enough in the tooth to remember when Liberal Democrat Ministers in the coalition Government actively argued for putting PCCs on the statute book in the 2010 to 2015 Parliament. I heard his comments on rural crime, which a number of Members are very concerned about. My hon. Friend the Member for Rugby set out clearly this Government’s commitment to policing and the police settlement that was finalised last month.

I want to take a moment to express my gratitude to each and every police officer, staff member and volunteer who works tirelessly, often in the most difficult circumstances, to keep our communities safe. This Government recognise the invaluable contribution that they make, and the need to ensure that policing is properly funded and protected. The challenges that police personnel face are very real. It is essential that they are equipped and resourced to do their jobs effectively. The resourcing of police forces is, understandably, a subject of considerable interest for parliamentarians and the public. Discussions that help to shine a light on these important issues, such as this debate, are to be welcomed.

In a moment I will turn to the specific focus of the debate—national insurance contributions—but in the interest of providing some important context and background, I will refer briefly to the police funding settlement that was put before the House in January. The settlement for 2025-26 provides an increase of up to £1.1 billion to policing, taking the Government’s total investment to £19.6 billion. We have listened to the police, and we know the challenges that they face.

I gently say to Opposition Members, who perhaps served in previous Conservative Governments, that there is quite a history with how the Conservatives funded or did not fund policing. I know the shadow Minister, the hon. Member for Stockton West (Matt Vickers), takes great delight in talking about the additional police officers towards the end of the Conservative time in office, but he also needs to remember the huge cuts that happened to policing. More than 20,000 police officers and thousands upon thousands of police staff were lost in the years of austerity and through the cuts that the Conservative Governments brought forward.

[John Slinger]

Does the Minister agree that if police officers are cut by 20,000, and then their numbers are replaced by 20,000, not a huge amount has been done to boost police numbers?

[Dame Diana Johnson]

My hon. Friend makes an important point. I am also conscious of the loss of experienced officers in that 20,000. We know that the service is now very young; I think about 40% of officers have under five years of service. That presents all sorts of challenges for policing.

I want to make it clear that we have increased the funding available for neighbourhood policing by an additional £100 million. That is compared with the provisional settlement that was announced at the end of last year. We in this Chamber can all agree that neighbourhood policing is so important to our constituents, and the figure for that will now be at £200 million. That investment is to kick-start the delivery of the 13,000 neighbourhood police officers, PCSOs and specials that the Labour Government promised in their manifesto. It will also ensure that public confidence in policing is restored. As I said when opening the debate on the police grant report last week in the main Chamber, the settlement underlines the Government’s commitment to working with the police to deliver the safer streets that all our constituents deserve.

It is worth saying that I spoke to the PCC in Cheshire last week about the funding settlement. He was positive about the settlement that had been announced for his force. He did not raise any specific issues on national insurance, and the force did not raise any concerns in the consultation on the provisional settlement after it was published in December.

[Esther McVey]

Did the Minister receive a further letter from the chief constable, expressing serious concerns about the rising number of serious sexual assaults going on in Cheshire?

[Dame Diana Johnson]

As I have just said, the PCC I spoke to last week did not raise any concerns about the financial settlement. Obviously, the PCC and the chief constable use that money in the way that they decide for Cheshire. I have certainly had conversations with the chief constable of Cheshire, and the right hon. Lady is right that I have received a letter from the chief constable that was copied to a number of Members of Parliament in Cheshire.

I accept and recognise that the changes to national insurance contributions will have an impact on public sector budgets, including policing. Although the decision to increase national insurance was made to ensure the sustainability of essential public services, I recognise that the changes create additional cost pressures for police forces. It is useful to note that in 2003, and in 2011 under the coalition Government, there was an increase in employer national insurance to fund the national health service and wider national priorities. So this is not unusual; Governments of both complexions have taken forward changes to national insurance.

It is also worth noting that the changes introduced in the Budget last year broadly return national insurance contributions revenue as a proportion of GDP to the level that they were before the previous Government’s cuts to employee and self-employed national insurance contributions. That sets the context, and this has been done in a way that does not result in higher taxes in people’s payslips.

[Wendy Morton]

When the right hon. Lady says that this change will not impact on employee’s payslips, she completely misses the point: whether in a business or the public sector, we cannot just keep squeezing and squeezing and expect things to continue as they are. If it is a business, we squeeze them out of business—there are no jobs; there will be no pay packet. If we keep squeezing the public sector, there will be no public services.

[Dame Diana Johnson]

With the greatest of respect to the right hon. Lady, who I think was Chief Whip under the disastrous premiership of Liz Truss, I am not really prepared to take lessons on economic stability and how to run the economy from a Government that trashed the economy and that caused such devastation to many families through the rise in interest rates and mortgages. I think perhaps a little humility might be in order.

We have set aside funding to protect the spending power of the public sector, including the NHS, from the direct impacts of the increase in employer national insurance. That is why we are providing compensation of £230.3 million to support forces with the cost of changes to national insurance and to ensure that no force is left out of pocket as a result. The right hon. Member for Tatton may like to know that that is similar to the funding provided by the previous Government in the 2024-25 police funding settlement to cover the additional costs of pension changes. Again, this is not unusual.

The right hon. Lady may have concerns about the £3.7 million pressure reported by her local police force as a result of the changes and the impact that that could have on officer numbers. As set out in the settlement papers, however, we are fully covering those costs. Actually, Cheshire is getting £3.9 million in national insurance compensation for next year—more than the anticipated need. That is alongside the £200 million that we are investing in neighbourhood policing to ensure not only that officer numbers are maintained, but that visible policing in our communities increases. Our mission is clear, and the funding provided in this settlement will ensure that forces across the country are equipped to meet the challenges that they face and to protect our communities.

As I have said a number of times this afternoon, I of course recognise that any additional pressures on forces are concerning. That is why we will continue to engage closely with forces and finance leads to ensure policing has the resources it needs.

I thank the right hon. Member again for securing this debate, and thank all those who have spoken. We are compensating for the national insurance increases to ensure that forces have the resources they need to protect visible neighbourhood policing. Our position could not be clearer. We will work in lockstep with the law enforcement system in our shared effort to keep people safe, whether that involves restoring and protecting the long-standing tradition of British policing, such as neighbourhood policing, or acting to combat the most dangerous emerging threats. This Government are wholly committed to providing the police with the powers, resources and tools that they need to protect the public.

[Dr Rosena Allin-Khan (in the Chair)]

I call Esther McVey to wind up the debate.

17:19

[Esther McVey]

I thank all Members for taking part in today’s debate. I think I understood from everyone that they would not want to see police officers taxed off our streets. There was one area on which I did not get consensus, which was why I said that the current Government were fiscally illiterate: what Government Members did not seem to understand is that money going to pay for extra taxes means money that will not be going on the frontline. The very fact that it is going in taxes and has to be compensated for shows that it will not go on the frontline. That is why I am asking for this policy to be stopped and reversed.

There seems to be collective amnesia among those on the Government Benches. The coalition Government came into power because the previous Labour Government pretty much crashed the economy. That was why the coalition was voted in. I have to say that I already see—in just seven months—that this Labour Government with that awful, awful Budget are doing exactly the same thing: they are crashing the economy all over again, but in record time. I just want to make sure that our police and our streets are protected.

I wish to thank the Minister because I know that she takes this matter very seriously. Whatever she said or did not say in the debate today, I know that she will take that message back and I know that she will be fighting to get this terrible employer national insurance contribution policy reversed.

Question put and agreed to.

Resolved,

That this House has considered the impact of planned changes to employer National Insurance

contributions on police forces.

17:21

Sitting adjourned.