National Insurance Contributions (Secondary Class 1 Contributions) Bill

Consideration of Commons amendments and / or reasons
Monday 24th March 2025 Lords Chamber

Commons Amendments

15:42

Motion A

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 1, to which the Commons have disagreed for their Reason 1A.

1A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

[The Financial Secretary to the Treasury (Lord Livermore) (Lab)]

My Lords, in moving Motion A, I will speak also to Motions E, E1, H, H1, W and W1. Before I address these Motions directly, I will briefly set out why the Bill before your Lordships’ House is necessary.

Upon taking office, this Government inherited three distinct crises: a crisis in the public finances; a crisis in our public services; and a crisis in the cost of living. That included a £22 billion black hole in the public finances, public services at breaking point, NHS waiting lists at record levels, and working people suffering the worst cost of living crisis in a generation, with inflation having reached over 11%. Faced with this reality, any responsible Government would need to act. That is why we took action in the Budget to wipe the slate clean, to repair the public services, to protect working people and to invest in Britain. That included an historic investment of an additional £25.7 billion for the NHS, which is helping to bring down waiting lists more quickly and put an end to over a decade of underinvestment and neglect.

We took this action in the fairest way possible, by keeping our manifesto promises to working people not to increase their income tax, national insurance or VAT. However, we needed to take some very difficult decisions elsewhere on tax, including the changes to employer national insurance contributions contained in this Bill. Following this change, more than half of businesses with national insurance liabilities will see no change or will see their liabilities decrease, and 865,000 employers will now not pay any national insurance at all next year.

We have consistently acknowledged that some businesses will now contribute more and that the impacts will be felt beyond businesses. This was a difficult decision, but it was the right decision, because not acting was simply not an option. As a result of the decision, and others, taken in the Budget, we have created a foundation of stability on which we are now taking forward our agenda of growth and reform.

There are consequences to responsibility, but the consequences of irresponsibility for the economy and for working people would have been far greater. We saw that with the Liz Truss mini-Budget, which crashed the economy and increased typical mortgage payments by £300 a month.

15:45

I now turn specifically to Amendments 1B and 5B, tabled by the noble Lord, Lord Scriven, and Amendment 8B, tabled by the noble Lord, Lord Londesborough. These amendments seek to include powers as part of this Bill to exempt certain groups from the changes to the employer national insurance rate and threshold in future. This includes powers to exempt from changes to the employer national insurance rate and threshold: care providers; NHS GP practices; NHS-commissioned dentists and pharmacists; charitable providers of health and care; and those providing hospice care. It includes powers to exempt businesses or organisations with fewer than 25 full-time employees from the change to the employer national insurance threshold.

The revenue raised from the measures in this Bill will play a critical role in repairing the public finances and rebuilding our public services. Clearly, any future changes which exempt certain groups from paying national insurance would have cost implications, necessitating either higher borrowing, lower spending, or alternative revenue-raising measures. For this reason, I respectfully ask noble Lords to withdraw Amendments 1B, 5B and 8B.

Amendment 21B, tabled by the noble Baroness, Lady Neville-Rolfe, seeks to require the Government to lay before Parliament a review of the impact of measures in this Bill on a number of sectors. The Government carefully consider the impacts of all policies, including the changes to employer national insurance. As I have said previously, an assessment of this policy has been published by HMRC in its tax information and impact note. The independent OBR’s Economic and Fiscal Outlook also sets out the expected macroeconomic impact of the changes to employer national insurance contributions. The Government and the OBR have therefore already outlined the impacts of this policy change. This approach is in line with previous changes to national insurance and previous similar changes to taxation, and the Government do not intend to provide further impact assessments. For this reason, I respectfully ask the noble Baroness not to press this amendment. I beg to move.

Motion A1 (as an amendment to Motion A)

Moved by

[Lord Scriven]

At end insert “, and do propose Amendment 1B in lieu—

1B: After Clause 1, insert the following new Clause—
“Exemptions from the changes made by section 1: NHS and social care
(1) The Treasury may by regulations made by statutory instrument specify that certain categories of persons are exempted from the changes to the rate of secondary Class 1 contributions made by section 1 of this Act.
(2) The categories of persons any of whom may be specified under subsection (1) are—
(a) a person providing a care home service or a domiciliary support service who is regulated under—
(i) Part 1 of the Health and Social Care Act 2008, or
(ii) Part 1 of the Regulation and Inspection of Social Care (Wales) Act 2016;
(b) a person providing a service who is regulated under section 47(1)(a) or (b) of the Public Services Reform (Scotland) Act 2010;
(c) a person providing a care home service or domiciliary support service regulated under the Health and Personal Social Services (Quality, Improvement and Regulation) (Northern Ireland) Order 2003;
(d) a person contracted to provide primary care under the provisions of—
(i) Part 4 of the National Health Service Act 2006,
(ii) Part 4 of the National Health Service (Wales) Act 2006, or
(iii) sections 17J to 17O of the National Health Service (Scotland) Act 1978;
(e) a person providing primary medical services through contractual arrangements with a Health and Social Services Board;
(f) a person contracted to provide general dental services under the provisions of Part 2 of the National Health Service (General Dental Services) Regulations 1992;
(g) a person providing general dental services under Part 2 of the General Dental Services (Northern Ireland) Regulations 1993;
(h) a person contracted to provide pharmacy services under the provisions of—
(i) Part 7 of the National Health Service Act 2006, or
(ii) Part 8 of the NHS (Pharmaceutical and Local Pharmaceutical Services) Regulations 2013;
(i) a person providing pharmaceutical services under Part 2 of the Pharmaceutical Services Regulations (Northern Ireland) 1997;
(j) a charitable provider of health and care;
(k) a provider of health and care registered as a charity by the Charity Commission for Northern Ireland;
(l) a person providing hospice care whether in a hospice or elsewhere;
(m) a carer to whom section 2(3A) of the National Insurance Contributions Act 2014 applies.
(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.””

[Lord Scriven (LD)]

My Lords, on Report, this House passed Lords Amendment 1 and a number of consequential amendments to exempt NHS services and social care from the Government’s hike in employer national insurance contributions. I am grateful that the House agreed with these Benches that such a rise will have potentially devastating consequences for those that form the backbone of community healthcare and the people they serve. Despite the immense financial pressure that these vital services already face, and despite the clearly expressed views by this House, the Government have chosen to overturn our amendments in the Commons. We accept the Commons reasons that these amendments engage Commons financial privilege, and we will not seek to break with convention today by asking the House to look at alternative amendments that would produce the same response.

This brings me to Motion A1 in my name, which seeks to introduce Amendment 1B in lieu, and Motion E1, which seeks to introduce Amendment 5B in lieu. They look complicated, but they really are very simple. These amendments would introduce a regulation-making power to allow the Government, at a later stage, to exempt social care, pharmacists and other NHS services included in my original amendment. Noble Lords will know that I do not propose this lightly. We on these Benches are naturally suspicious of giving any Government such powers without full scrutiny provided in primary legislation, but we are so profoundly worried about the impact of the Bill on the NHS and social care.

My amendment seeks to address the deeply concerning implications of the national insurance contribution increases for our vital health and social care providers, NHS dentists, community pharmacists, hospices, GPs and social care organisations. The Government’s current approach to reimbursement, embedded in next year’s financial contract negotiations, will not solve the financial cliff edge and cash-flow issues many providers face. It is a damaging policy that will only exacerbate the existing financial crisis these sectors already face.

I will not dwell at length on the consequences of the national insurance increases as we have already explored them thoroughly. However, it is essential to reiterate the stark realities. The national insurance contribution increase imposes an immediate and substantial financial burden that will force some NHS dentists, community pharmacists, hospices, GPs and social care providers to make difficult choices, potentially reducing services and care packages, cutting staff, reducing access and indirectly impacting the most vulnerable in society. This will also add pressure on the NHS, as hospital beds will be blocked by keeping medically fit individuals in hospital because they cannot access appropriate social care packages.

The Government’s proposed solution—reimbursing these costs through next year’s contract negotiation—is fundamentally flawed. It amounts to a system of taking money away from those struggling organisations, with no guarantee of its full return. This will create significant cash-flow problems, particularly for those already operating on tight budgets. It could be the very issue that pushes some community pharmacists, social care providers and dentists over the edge, rendering them unable to continue to provide essential NHS services and care.

Furthermore, the NHS contracting cycle is notoriously complex. I know this as a former NHS manager. The reality is very different from being in a Whitehall office. It is complex and opaque. Contract negotiations bundle in various factors, including inflation and other cost pressures. There is no guarantee that the full amount of the national insurance increase will be reimbursed. Too often, initial drafts appear to include all necessary provisions, only for providers to discover mid-year that the additional activity requirements and other tricks that funders put in have effectively negated the promised increase.

Also, delays in finalising contracts are commonplace, leaving many sectors with months of accumulated pressures and unresolved cash-flow and debt issues. For example, community pharmacists are currently operating under a contract that ended in March last year. With only two weeks remaining in this financial year, a new agreement is still outstanding and they have not been reimbursed for the cost pressures of this financial year.

The uncertainty and delay create immense financial instability. The current system lacks the flexibility needed to address the immediate crisis that the national insurance increase will impose on some NHS and social care providers. A more agile and realistic approach is urgently required. Therefore, my amendment proposes that the Government can be granted the power to utilise a statutory instrument if necessary. This would allow for targeted and timely support to ensure that these vital services are not destabilised and pushed to the brink. The Government must abandon their rigid adherence to self-imposed rules and listen to the concerns raised about the impact of the national insurance increase. They must not continue marching forward blindly with this act of folly.

My amendment makes this offer to the Minister: give yourself some flexibility. Allow yourself to act quickly to reverse this damaging national insurance contribution rise for our health and social care systems. It would give the Government a way to get off the hook once they see how this increase will jeopardise community health, social care and other essential services. If the Minister will not listen, he will leave me no option but to test the opinion of the House. This is a generous offer. I urge him to accept my amendments. I beg to move.

[Lord Londesborough (CB)]

My Lords, it is with some regret that I do not insist on my Amendment 8 and its consequential amendments. I am disappointed that financial privilege has been invoked to prevent a full and proper debate in the other place on the potential damaging impact that reducing the class 2 secondary threshold by a brutal 45% will have on jobs and growth for small businesses and organisations employing fewer than 25 staff. I fear the Government will look back on 6 April, the day the new NICs regime kicks in, as a day of economic self-harm—a second April Fools’ Day, if you like.

I do propose to move Amendment 8B in lieu. In the spirit of pragmatism, my amendment, like that from the noble Lord, Lord Scriven, would simply bestow on the Treasury the power—through statutory instrument—to specify exemptions on the lowering of secondary class 1 thresholds for businesses, charities and, indeed, all organisations employing fewer than 25 people. We are talking about 10 million jobs across the UK that are not protected by Clause 3’s increase in the employment allowance, which offsets the NICs increases but, typically, only for those employing three or fewer staff. Given the potential damage to employment, wages and growth, why would the Government not want this weapon in their armoury in what will be a very difficult year ahead for small employers, who also face close to 7% increases in the national minimum wage and added compliance costs with the new Employment Rights Bill?

I support Amendments 1B and 5B in the name of the noble Lord, Lord Scriven, which strike me as an entirely sensible and pragmatic exemption tool to give to the Treasury given the very challenging circumstances facing care homes, hospices, pharmacies and other primary care providers.

Finally, I also support Amendment 21B in the name of the noble Baroness, Lady Neville-Rolfe, which seeks a review of the impact of NICs increases by sector. The impact note that came with the Bill was extraordinarily light on detail, especially when you consider that the Bill commits employers across these sectors to more than £5 billion per annum in additional NICs and impacts more than 10 million jobs.

I asked the Minister in Committee how many jobs in each sector would be impacted by the increase in NICs—a fairly basic question, one could argue, and yet no answer has been forthcoming. We heard on Report that such assessments would be

“econometrically impossible”.—[Official Report, 25/2/25; col. 1672.]

I respectfully disagree. We are asking for sectoral impact assessments that cover such key issues as the number of jobs impacted and the impact on vacancies, job creation, redundancies, labour activity and output, and wages. It was an entirely reasonable request and one the Treasury should readily embrace.

[Baroness Neville-Rolfe (Con)]

My Lords, the amendments in this group, including my Amendment 21B, address the very real negative impact of this jobs tax that the Government refuse to acknowledge. The Bill is the most important economic measure they have put forward so far and it makes significant changes to millions of businesses and social enterprises on a very short timescale. These businesses have raised concerns that are reflected in a flat-lining of growth, as worried owners seek to anticipate such a brutal change. Noble Lords from across the House have raised the consequences a number of times, yet the Government remain unreceptive.

At every stage of this Bill’s progression, we have raised the concerns of the healthcare sector about the effects on care homes, pharmacies, dentists, GP surgeries and hospices. It will have a real impact on people’s lives. I am particularly concerned about the hospice sector. The recent extra funding provided is capital funding and will not support day-to-day functions. Hospice UK has reported that the burden of the increase in employer NICs will be £44.3 million a year, which will not be covered by the £26 million of revenue funding for children and young people’s hospices, previously mentioned by the Minister. Last year, children’s hospices were provided with £25 million through the children and young people’s hospice grant. Can the Minister tell us how much of his £26 million is additional funding and how much is in fact recurring?

16:00

I am certain that there will be a number of hospices that are unable to absorb this cost. They will be left struggling, with more people dying in needless pain and anguish. As such, the amendment from the noble Lord, Lord Scriven—it is good to see him back in his place—is important to ensure that hospice care can be provided for anyone who needs it: the flexibility that he spoke of.

I also support the amendment on small businesses in the name of the noble Lord, Lord Londesborough, wholeheartedly. I cannot understand why the Government do not recognise the essential role that these entrepreneurial businesses play in supporting economic growth. I mentioned on Report the large number of small businesses that exist in the UK: a great strength. It is 5.5 million. This is an important group of people. The noble Lord’s well-judged amendment would allow the Treasury to protect them from this damaging measure if the need arose.

The Government have also rejected the calls from many of us to publish a full impact assessment, stating, as the Minister has done again today, that they had already published such an assessment. I would be grateful if the Minister could point me to those figures, because, as it stands, the impact note published on 13 November 2024 fails to mention a single one of the sectors in the review amendment. It does not refer a single time to charities with an annual revenue of less than £1 million, early years providers, hospices, the hospitality sector, pharmacies, small businesses, social care or transport for children with special educational needs or disabilities. Yet we know from multiple surveys by charities and business organisations about the negative impact of these changes on headcount and costs—and that is before they have even come into effect.

I am very disappointed by the way in which the Government have gone about this. Their reasoning is weak. Frankly, it is an affront to this House that they have failed to provide proper reasons, given that there is clearly no government impact assessment on any of these important sectors. It is something that has been discussed many times, and Peers from all Benches have agreed that the short note that the Government have provided is completely insufficient for effective scrutiny. This review will ensure that they do a better job in the run-up to future fiscal events. I hope my review amendment will secure the support of the House.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I rise very briefly to note that the Minister referred to the £22 billion black hole. On occasion when that occurs in these kinds of debates it does feel that the issue is being taken with a certain glib pinch of salt because we have heard that phrase so often. But, if I accept that there is a real problem, one of the things I have been absolutely convinced by the Government on is the need for economic growth to get out of this situation—which is why I cannot for the life of me work out how we have ended up in a situation where the Government are introducing measures that are going to damage growth so substantially. I agree with the Minister that we need to fill that £22 billion black hole, but, as has been argued across the House from a range of people, these measures are not going to do that: they are going to make that hole even deeper.

Therefore, I appeal to the Minister to stop digging himself ever deeper into this hole and at least accept that these amendments are modest and give the Government an opportunity to review whether the national insurance contribution increases will do the damage that is alleged. I have been inundated on this issue more than on any other since I have been in this House, by people working in social care, hospices, charities and small businesses.

Everybody is tearing their hair out and all they want is for the Government to listen. These very modest amendments simply call for the Government to have the capacity and flexibility to think again, in case those people worried about the increases are right. If the Government are right, they have nothing to worry about and I suggest they show a little humility over the concerns raised by a wide range of political voices in this House.

[Lord Weir of Ballyholme (DUP)]

My Lords, I too support the amendments in this group; I will speak briefly on them. Like many Members of your Lordships’ House, I share the general scepticism—indeed, hostility—towards the direction of travel of this legislation. Like others, I believe that, if the Government’s central mission is around economic growth as the stimulant, both with respect to the broader economy and from the point of view of public finances, this ultimately takes us very much in the wrong direction.

I appreciate, however, that that wider message is not what is before us today. The amendments before us are more nuanced and modest in their nature. They have been quite cleverly drafted by the noble Lord, Lord Scriven, and others, and are designed not to make a direct challenge to the financial authority of the House of Commons. It is disappointing that the Commons took that approach but, nevertheless, these are respectful and well-drafted amendments that try to deal with this issue. Specifically, the Minister mentioned that one of the key considerations and intentions of this Government is the reform and protection of public services. That stated aim, at least, is one that I think all of us in this House would share.

Central to that is the provision of support for the National Health Service, to ensure that the necessary reforms take place to save it from the crisis in which it has been left. While many pieces in that jigsaw will need to be fitted in, central to any chance we have of improving the National Health Service will be dealing with social care. The two are inextricably linked. In particular, we will need to turbocharge the provisions that can be made on social care and also—as is contained within the amendment—on a range of related topics, from dentistry to pharmacies, so that the pressure can be taken off the front-line services of the NHS, including hospitals.

It is critical, both from a health perspective and an economy perspective, that we ensure the swiftest possible turnarounds in hospital stays. Too many people in our society are bed-blocking. That is not a choice that they wish to make and it is detrimental to our health service, to those individuals and to the economy. Therefore, it strikes me that we should be looking to take all measures that can possibly improve social care and improve support for hospital provision.

It seems to me that the proposed national insurance changes would be deeply detrimental to those sectors. Indeed, we have had warning after warning from people in those sectors about the impact that it will have. Therefore, I believe that these modest amendments at least an attempt to redress that. In their wisdom, the Government will tell us that they believe the change will simply be beneficial; it will bring in additional revenue without in any way damaging the social care system. Perhaps the wisdom of the Government is greater than that of many of us in this House. Therefore, we are not seeking to impose our views but seeking a much more modest proposition, which simply says: let us keep this under review and let us have the opportunity for the Government—should they be proved wrong on this issue—to make a swift intervention. That seems eminently sensible.

Similarly, with the amendment on small businesses—they will be the fuel of our economy and in many ways critical aspects which will impact on growth—the opportunity is there not to challenge the tax rises directly but to ensure that intervention can take place.

On the final amendment, if we are making legislation, ultimately it should be evidence-based, and that means not simply at the time when we are making it. What is the direct impact? To have a range of reviews across a number of sectors to see whether intervention is then needed seems to be an eminently sensible approach.

I suspect that, in an ideal world, many of us would have liked the amendments before us today to have gone much further, but they seem modest and nuanced in their nature and an attempt at an olive branch to the opposition that came from the House of Commons, so I urge the Government to take a common-sense approach and adopt these amendments rather than forcing us into a Division on them.

[Lord Leigh of Hurley (Con)]

My Lords, I have spoken in all other stages of this Bill. I am grateful to the Minister for reminding us of the rationale for it, which is the alleged £22 billion black hole which no independent economist can find. The OBR can find £9 billion—

[Noble Lords]

Oh!

[Lord Leigh of Hurley (Con)]

No, no independent economist. I would be grateful if noble Lords opposite would stand up and identify an independent economist who agrees with the £22 billion black hole—I will take interventions anytime.

When they came into office, this Government were left with the United Kingdom having the fastest growth in the G7. What happened after that was the Chancellor came in and talked down the economy dramatically. Legislation came in against non-doms and, as a result, 10,000 non-doms—equivalent to 0.5 million taxpayers—left the country. The Employment Rights Bill is raising its ugly head, frightening people, and the IHT effect on BPR and APR has been dramatic. There is a poll out today by Family Business UK of 4,200 family companies, and they have all said they will be cutting back on recruitment. This is what is facing our economy. It led to the shrinkage in GDP in January and it has now led to the emergency Budget, none of which will be helped by these NI increases at all.

As my noble friend Lady Neville-Rolfe has said, we have had cries of anguish from the third sector. The CEO of Thames Hospice has said that people will die in greater pain and anguish as a result of the effect of the NI changes on employment in hospices. Will the Labour Party Members vote, with head high, in the Lobbies to support this? Will they do so in the Commons? This Government will be constantly reminded of the damage they are doing to the social care sector, to the hospices sector, and indeed, as the noble Lord, Lord Londesborough, said, to the small businesses sector. It is not too late. I hope noble Lords will think very carefully about how they vote this afternoon.

[Lord Cromwell (CB)]

My Lords, I will genuinely be brief. I agree with the spirit of the Government in rejecting carve-outs, no matter how emotionally appealing they may be. However, looking at these amendments, which I support, I do not understand why the Government are resistant to the Treasury having a practical route to act if there is a change of policy in due course. Otherwise, we are binding future Governments to have to produce new legislation to create carve-outs if they wish to do so. It seems to me rather obstinate not to accept these amendments, which give that flexibility without overturning the nature of the Bill and agreeing to carve-outs. So, I hope the Minister will either explain why the Government are unwilling or will accept these amendments.

16:15

[Baroness Noakes (Con)]

My Lords, I support all the amendments in lieu in this group, particularly Amendment 21B by my noble friend Lady Neville-Rolfe, asking for an ex post review of the impact on various sectors of this jobs tax. It is official government policy, confirmed by the leader in the other place, that Parliament will be given the information it needs to scrutinise legislation properly, but, shamefully, the Treasury refused point blank to give the information that we requested in order to scrutinise this Bill properly. My noble friend’s amendment is modest and reasonable, and if the Government do not accept it then that will show a complete lack of respect for Parliament and the process of parliamentary scrutiny.

I want to underline a point made by my noble friend Lady Neville-Rolfe about hospices. At the earlier stages of the Bill, the Minister kept repeating that the Government were putting £100 million into hospices and £26 million into children’s hospices. It is clear that neither of these amounts represents additional money available to absorb the cost pressures produced by the national insurance changes. My noble friend explained that, and I hope the Government will not try to pretend that the funding situation for hospices is anything other than completely dire at the moment.

[Lord Ashcombe (Con)]

My Lords, I would like to personalise this a little, because the hospice movement is unbelievably important in this country, and I am grateful to other noble Lords for raising the point again. I suppose that my family has been very fortunate, in unfortunate circumstances, to have the benefit of two hospices, both at end of life. Both hospices face significant shortfalls in their annual running costs and live off the back of occasional big legacies. They already have to raise substantial amounts of money, and the national insurance increase puts yet more pressure on the system. We have had the increase in minimum wages, which means that they have suffered those costs in addition; doctors and nurses do not come cheap, as we know. This just drives costs up further—for the hospice closest to home, the figure is nearly £0.5 million.

So what does the national insurance increase mean? In this particular case, it means either the loss of three nurses, who conduct some nearly 4,000 visits a year in the community, preventing the need for hospital care, or losing one bed, which would be dedicated to the most complex needs for patients at the end of their life.

If hospices are forced to reduce their care to the community, what happens next? They play such a critical role in supporting the NHS, which is not subject to the increase, both in terms of community care and in easing pressure on acute beds in hospitals, as well as facilitating discharges from hospital. If the Government continue to impose financial strain on the hospice sector, more hospices will be forced to scale back services or even close. That is something we cannot live with in this country, and it would place yet greater strain on the NHS—a particularly difficult sector, as we know, and one that we are trying not to pressure any further. When salary increases for medical staff and the rises in national insurance are factored in, this particular hospice will have to raise yet another £200,000 on top of the £0.5 million that I mentioned earlier, and that hospice is but one of 200 fantastic operations in this country.

I make again the point that various noble Lords have made: the recent announcement of the £100 million funding from His Majesty’s Government for the hospice movement and the £26 million for the children’s hospices is for capital projects, which, while very welcome, does not help this particular situation—a situation that the Prime Minister singularly seemed to ignore at PMQs last week. I beg the Government to reconsider their position.

[Baroness Monckton of Dallington Forest (Con)]

My Lords, I rise to speak in favour of these amendments and to speak very briefly about hospices—which I know many noble Lords have already done. Our hospices support over 300,000 people, mostly in the community, and this tax will cost the sector hundreds of thousands of pounds. Beds will close and outreach services will be decimated. Where will people go to die? Yes, hospitals offer palliative care, but only four out of 10 hospitals have the services that are necessary seven days a week, despite this having been a national standard in 2004.

The assisted suicide Bill is being debated in the other place. Assisted dying is what hospices do: ensuring that people can die in dignity, are properly cared for and can live as fully as they are capable of right to the end of their life. We only die once. I agree with what my noble friend Lord Leigh of Hurley has said previously: that not exempting hospices from this tax is shockingly cruel. But it is worse than that, because it shows a lack of compassion and an absence of humanity that are truly shocking. It leaves me speechless, and I have nothing more to say.

[Baroness Kramer (LD)]

My Lords, we on these Benches do not dispute that the Government were handed a dire fiscal situation; the question is what taxes they choose to raise to remedy it? We feel that they have made the wrong choice in this instance.

With these amendments in lieu—certainly those from my noble friend Lord Scriven and the noble Lord, Lord Londesborough, from the Cross Benches—we have proposed that, in key areas, power is provided to the Government and to the Treasury to reverse that decision in these narrow circumstances if they discover, as they see this event play out, that the choices they made were not those that they thought they had made. It is very unusual from these Benches for us to be willing to provide what is, in effect, a Henry VIII power to the Government, and that we do so reflects our deep anxiety. This is not political game playing; we are deeply anxious about what will happen with community health, social health, small businesses and the knock-on consequences of all that.

I want to thank the noble Baroness, Lady Noakes, because it was her thought in Committee that one way to at least find some common ground would be to pass powers over to the Secretary of State. That is the pattern that we have followed. I hope that the Government will see that they are not forced to act in any way by two of these amendments in lieu; they are being given the opportunity and the possibility, and we hope they will accept them in that spirit.

The noble Baroness, Lady Neville-Rolfe, has proposed an amendment in lieu which would require an impact evaluation. I have to say to the Minister that, when he spoke at the opening of this debate about how few businesses would be impacted by the increase in employer NICs, I began to think that he had not been given the central information that he should have been given. If he were to look, he would discover that that vast number of companies that are not affected are those with three employees or fewer, but that those small companies that we look to for scale-up and to drive growth are impacted.

Again, this underscores the fact that to roll it out effectively—and I fully accept that this is new and has not been the pattern of past Governments—we need to move to a time when we get much more detailed impact evaluation as we deal with these issues in this House. We on these Benches hope very much that the Government will accept the three amendments in lieu. If they do not, then we will support all three.

[Baroness Neville-Rolfe (Con)]

My Lords, we have worked together on these three modest, common-sense amendments, and we will also support them if it comes to a vote.

[Lord Livermore (Lab)]

My Lords, I am very grateful to all noble Lords who have taken part in this debate. As I have outlined, the measures contained in this Bill are necessary to repair the public finances, to rebuild public services, to protect working people and to invest in Britain. This includes an historic investment of an additional £25.7 billion for the NHS that is helping to bring down waiting lists more quickly and puts an end to over a decade of underinvestment and neglect. In doing so, the Government have kept their promise to working people to not increase their income tax, their national insurance or their VAT. We have always acknowledged that there are costs to responsibility, but the cost of irresponsibility would have been far greater.

The noble Baroness, Lady Neville-Rolfe, asked about the impact of the Bill on hospices. The Government of course recognise the vital role that hospices play in supporting people at the end of life and their families, and the cost pressures that the hospice sector has been facing over many years. That is why, as several noble Lords have mentioned, we are supporting the sector with a £100 million increase for adult and children’s hospices to ensure that they have the best physical environment for care, and £26 million revenue funding to support children’s and young people’s hospices. All charities, including hospices set up as charities, can also benefit from the employment allowance, which this Bill more than doubles from £5,000 to £10,500.

On assessments, as I have said previously, the Government and the OBR have already outlined the impacts of this policy change. This approach is in line with previous changes to national insurance and previous similar changes to taxation; the Government do not intend to provide further impact assessments.

The revenue raised from the measures in this Bill will play a critical role in repairing the public finances and rebuilding our public services. Any future changes which exempt certain groups would have cost implications, necessitating higher borrowing, lower spending or alternative revenue-raising measures. For these reasons and the other reasons that I have already set out, I respectfully ask noble Lords not to press their Motions containing Amendments 1B, 5B, 8B and 21B.

[Lord Scriven (LD)]

My Lords, I thank all noble Lords who have taken part in this informative and important debate. I support the Motions in the names of the noble Lord, Lord Londesborough, and the noble Baroness, Lady Neville-Rolfe.

It is a strange world we live in. I never thought that I would come to this House as a Liberal Democrat and argue for a Minister to have a Henry VIII power to try to help the Government with the consequences of a policy, and to have a Minister turn it down. No one is denying the right of the Government to raise revenue; what my amendment does is give the Government a tool to act swiftly on the consequences of what may, and probably will, happen in health and social care. It is not just pharmacists, GPs, hospices and dental practices that will suffer but people who require their services. Some of the most vulnerable will find that services stop because of the cash-flow and debt issues that the Bill will exacerbate in services that are already pressurised.

It is disappointing that when the olive branch is given, the Minister has decided to continue with the folly. Looking at the faces of some Members behind him, I think that they understand some of the potential consequences. It is disappointing that the Government and the Minister have not agreed to the olive branch. I therefore believe that it is right that I ask the House to agree to my Motion A1. I would like to test the opinion of the House.

16:28

Division 1

Ayes: 271

Noes: 173

16:39

Motion B

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 2, to which the Commons have disagreed for their Reason 2A.

2A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

[Lord Livermore (Lab)]

My Lords, in moving Motion B, I will speak also to Motions C, D, F, G and J to V. The other place has disagreed to Amendments 2, 3, 4, 6 and 7 and Amendments 9 to 20, as they interfere with public revenue. The other place did not offer any further reason, trusting that this reason is sufficient. On that basis, I hope that noble Lords are content not to insist on Amendments 2, 3, 4, 6, 7 and 9 to 20. I beg to move.

[Baroness Neville-Rolfe (Con)]

My Lords, the Government have rejected a number of amendments which call for the exemption of various sectors from the jobs tax, citing financial privilege. The amendments would have protected small business, providers of transport for students with special educational needs, small charities, providers of early years education and hospices, which we have already heard a lot about today, because of their desperate situation, from my noble friends Lord Leigh, Lord Ashcombe, Lady Monckton and Lady Noakes.

The Government’s refusal to acknowledge the damaging impacts that this tax on jobs will have is very concerning. The tax is in complete contrast to their insistence that they are the party of growth. Indeed, the most recent GDP statistics from the ONS indicate that the economy shrank by 0.1% in January. The way the Government are now taxing the more productive private sector to pay for a huge increase in less productive public projects and salaries means, I fear, that this trend will continue.

We have recast our review clause into a modest one, which we will be voting on shortly. We will not oppose the government amendments in this second group, but I give notice that we are planning to seek assistance for those providing SEND transport in the Bus Services (No. 2) Bill.

[Baroness Kramer (LD)]

My Lords, briefly, we regret very much that the other place rejected amendments that would have exempted key groups such as universities, nurseries and those providing SEND transport—essential services that provide key support will be under huge financial pressure. We have had to be selective. We have offered the Government opportunities to take powers in the areas where we think the greatest damage will be done most rapidly. Therefore, we will not press the Government on these amendments.

[Lord Livermore (Lab)]

My Lords, I am very grateful to the noble Baronesses, Lady Neville-Rolfe and Lady Kramer, for their agreement not to insist on these amendments. We have had to take difficult but necessary decisions to repair the public finances and rebuild our public services. Not acting was simply not an option. As a result, through this decision, and others taken in the Budget, we have created a foundation of stability on which we are now taking forward our agenda of growth and reform.

Motion B agreed.

Motion C

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 3, to which the Commons have disagreed for their Reason 3A.

3A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion D

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 4, to which the Commons have disagreed for their Reason 4A.

4A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motions C and D agreed.

Motion E

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 5, to which the Commons have disagreed for their Reason 5A.

5A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

[Lord Livermore (Lab)]

My Lords, I beg to move.

Motion E1 (as an amendment to Motion E)

Moved by

[Lord Scriven]

At end insert “, and do propose Amendment 5B in lieu—

5B: After Clause 2, insert the following new Clause—
“Exemptions from the changes made by section 2: NHS and social care
(1) The Treasury may by regulations made by statutory instrument specify that certain categories of persons are exempted from the changes to the thresholds for secondary Class 1 contributions made by section 2 of this Act.
(2) The categories of persons any of whom may be specified under subsection (1) are—
(a) a person providing a care home service or a domiciliary support service who is regulated under—
(i) Part 1 of the Health and Social Care Act 2008, or
(ii) Part 1 of the Regulation and Inspection of Social Care (Wales) Act 2016;
26(b) a person providing a service who is regulated under section 47(1)(a) or (b) of the Public Services Reform (Scotland) Act 2010;
(c) a person providing a care home service or domiciliary support service regulated under the Health and Personal Social Services (Quality, Improvement and Regulation) (Northern Ireland) Order 2003;
(d) a person contracted to provide primary care under the provisions of—
(i) Part 4 of the National Health Service Act 2006,
(ii) Part 4 of the National Health Service (Wales) Act 2006, or
(iii) sections 17J to 17O of the National Health Service (Scotland) Act 1978;
(e) a person providing primary medical services through contractual arrangements with a Health and Social Services Board;
(f) a person contracted to provide general dental services under the provisions of Part 2 of the National Health Service (General Dental Services) Regulations 1992;
(g) a person providing general dental services under Part 2 of the General Dental Services (Northern Ireland) Regulations 1993;
(h) a person contracted to provide pharmacy services under the provisions of—
(i) Part 7 of the National Health Service Act 2006, or
(ii) Part 8 of the NHS (Pharmaceutical and Local Pharmaceutical Services) Regulations 2013;
(i) a person providing pharmaceutical services under Part 2 of the Pharmaceutical Services Regulations (Northern Ireland) 1997;
(j) a charitable provider of health and care;
(k) a provider of health and care registered as a charity by the Charity Commission for Northern Ireland;
(l) a person providing hospice care whether in a hospice or elsewhere;
(m) a carer to whom section 2(3A) of the National Insurance Contributions Act 2014 applies.
(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.””

[Lord Scriven (LD)]

My Lords, I beg to move my amendment.

Motion E1 (as an amendment to Motion E) agreed.

Motion F

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 6, to which the Commons have disagreed for their Reason 6A.

6A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion G

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 7, to which the Commons have disagreed for their Reason 7A.

7A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motions F and G agreed.

Motion H

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 8, to which the Commons have disagreed for their Reason 8A.

8A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

[Lord Livermore (Lab)]

My Lords, I beg to move.

Motion H1 (as an amendment to Motion H)

Moved by

[Lord Londesborough]

At end insert “, and do propose Amendment 8B in lieu—

8B: Clause 2, page 1, line 15, at end insert—
“(3A) The Treasury may by regulations made by statutory instrument specify that businesses or organisations with fewer than 25 full-time employees are exempted from the changes to secondary Class 1 thresholds made by this section.
(3B) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.””

[Lord Londesborough (CB)]

My Lords, I beg to move Motion H1 and wish to test the opinion of the House.

16:45

Division 2

Ayes: 276

Noes: 165

16:57

Motion J

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 9, to which the Commons have disagreed for their Reason 9A.

9A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion K

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 10, to which the Commons have disagreed for their Reason 10A.

10A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion L

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 11, to which the Commons have disagreed for their Reason 11A.

11A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion M

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 12, to which the Commons have disagreed for their Reason 12A.

12A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion N

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 13, to which the Commons have disagreed for their Reason 13A.

13A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion P

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 14, to which the Commons have disagreed for their Reason 14A.

14A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion Q

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 15, to which the Commons have disagreed for their Reason 15A.

15A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion R

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 16, to which the Commons have disagreed for their Reason 16A.

16A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion S

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 17, to which the Commons have disagreed for their Reason 17A.

17A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion T

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 18, to which the Commons have disagreed for their Reason 18A.

18A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion U

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 19, to which the Commons have disagreed for their Reason 19A.

19A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motion V

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 20, to which the Commons have disagreed for their Reason 20A.

20A: Because the Lords Amendment interferes with the public revenue, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Motions J to V agreed.

Motion W

Moved by

[Lord Livermore]

That this House do not insist on its Amendment 21, to which the Commons have disagreed for their Reason 21A.

21A: Because information has already been published about these matters and a further review is not necessary.

[Lord Livermore (Lab)]

My Lords, I have already spoken to Motion W. I beg to move.

Motion W1 (as an amendment to Motion W)

Moved by

[Baroness Neville-Rolfe]

At end insert “, and do propose Amendment 21B in lieu—

21B: After Clause 3, insert the following new Clause—
“Review of effect on certain sectors
(1) The Chancellor of the Exchequer must, within six months of the day on which this Act is passed, lay before Parliament a review of the impact of the measures contained in this Act on the persons and sectors in subsection (2).
(2) The review must consider the impact on—
(a) charities with annual revenue of less than £1 million;
(b) early years providers;
(c) hospices;
(d) the hospitality sector;
(e) pharmacies;
(f) small businesses;
(g) social care;
(h) transport for children with special educational needs or disabilities.””

[Baroness Neville-Rolfe (Con)]

My Lords, I beg to move Motion W1 and to test the opinion of the House.

16:58

Division 3

Ayes: 273

Noes: 172