National Insurance: Employer Contributions

Baroness Humphreys Excerpts

Thursday 9th January 2025 Lords Chamber

Asked by

[Baroness Humphreys]

To ask His Majesty’s Government what assessment they have made of the impact of the changes to employer National Insurance contributions, including the reduction in the per-employee threshold, on town and parish councils in Wales.

[Baroness Humphreys (LD)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and, in so doing, refer your Lordships to my registered interests.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

My Lords, I thank the noble Baroness for her Question. The devolved Governments will receive funding through the Barnett formula in the usual way in 2025-26. The Welsh Government have confirmed that they will use this funding to help local government in meeting increases in national insurance contribution costs. The Government have also announced £515 million of support for local government in England to manage the impact of changes to employer NICs. The Government have no direct role in funding parish and town councils.

[Baroness Humphreys (LD)]

I thank the Minister for that Answer. I welcome the Government’s announcement of the £515 million NICs compensation package as part of the provisional local government finance settlement, but I am disappointed that they have confirmed that compensation to local government bodies will not extend to town, community and parish councils. Could she explain why it is fair that some elected bodies are given financial support and others are not?

[Baroness Taylor of Stevenage (Lab)]

As I explained, the Government have no responsibility for funding town and parish councils. The Welsh Government’s budget is growing in real terms in 2025-26. In fact, the settlement is the largest in real terms for any Welsh Government since devolution. Currently, the Welsh Government also receive an additional 5% transitional factor as part of the Barnett formula, while they are funded above their independently assessed relative need compared to England to 115%. If they wish to provide further support to town and parish councils, they are able to do so.

Shared Prosperity Fund: Wales

Baroness Humphreys Excerpts

Wednesday 4th December 2024 Lords Chamber

[Lord Khan of Burnley (Lab)]

My noble friend raises an important point. Many aspects of levelling up did not work, not just in Wales but across the United Kingdom. The Government are having a transitional year, during which we will work with our Welsh Government counterparts to ensure what is best for local projects and local communities. As for the future, the answer is yes: we will ensure that the Welsh Government have enough time to plan and decide on structural funding so that they have the best ability to put the money into their local communities.

[Baroness Humphreys (LD)]

Llongyfarchiadau mawr i dîm merched Cymru o’r beinciau yma hefyd—congratulations to the Welsh team from these Benches as well. I draw your Lordships’ attention to my registered interests. I thank the Minister for his announcement. It will bring some clarity about what will happen to the voluntary sector in Wales in the next 12 months. There has been uncertainty, added to which the third sector will be hit by the NICs rise, which will lead to higher costs that will need to be covered in any follow-up funding. Will the Minister ensure that the input and involvement of the third sector is sought through the NCVO and the WCVA, and that multiple-year funding agreements are in place to ensure the continuation of vital projects?

[Lord Khan of Burnley (Lab)]

My Lords, the noble Baroness makes an important point. The short answer is yes: we will ensure that our counterparts in Wales have those discussions. I will pass the message on to my honourable friend in the other place so that the third sector is also a part of his discussions with the Welsh Government on how we can work closely together as central government, devolved government and the third sector.