National Insurance Contributions (Secondary Class 1 Contributions) Bill

Debate between Baroness Neville-Rolfe and Baroness Noakes

Report stage
Tuesday 25th February 2025 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, I will speak to my amendments in this group and to Amendment 42 in the name of my noble friend Lady Lawlor.

One of the difficulties the House has faced in dealing with this Bill has been the Government’s refusal to provide official estimates of the effects they expect the proposals to have on the individual sectors of the economy where its effects are likely to be the most profound. When we discussed their assessment in Committee, the Minister referred us to the impact note published on 13 November 2024. But I am afraid it is a very limited document, with only five pages of substantive text and no detailed assessment of the impact of the national insurance charge on a number of very important areas. Given the harm this policy will have in the many sectors we have already discussed, it is vital that the Government assess this properly. So, as a second-best measure, we have suggested additions to the Bill requiring the Government to look at the various areas of concern and make an assessment of the effect of the NICs changes—including the employment allowance, which should of course limit the damage to the very smallest businesses.

My Amendment 38 would require a sector-by-sector analysis of the impacts of the Government’s jobs tax. I am very grateful to my noble friend Lady Noakes and the noble Lord, Lord Londesborough, for supporting the amendment. It includes key areas that are adversely affected but that we have barely discussed today, notably hospitality, the creative industries and retail, whose challenges were starkly set out in Committee by my noble friend Lord Wolfson of Aspley Guise, with his unique experience of the sector.

Amendment 37 seeks to establish the Government’s view on the effect of the jobs tax on economic growth. We know that economic growth is the Chancellor’s number one policy, so I hope the Minister will be able to give the House some clarity on the Government’s expectations in this area. I also support my noble friend Lady Lawlor’s Amendment 42 and look forward to hearing from her.

We are very concerned about the Government’s failure to publish a full sector-by-sector impact assessment for this policy. I therefore intend to test the opinion of the House on my Amendment 38.

[Baroness Noakes (Con)]

My Lords, I have added my name to my noble friend’s amendment. We debated impact assessments several times in Committee and the Minister’s reply was always the same formula. It went along the lines of: “HMRC has published a tax information note”—which the rest of the Committee thought was wholly inadequate—“and the Government never do any more than this on tax legislation. The Government intend to do no more in respect of this Bill”. That was not a proper debate on impact assessments. The formula hardly changed over the four days we spent in Committee. The Minister eventually cited some precedents, but they were much smaller in scale and different in impact, and provided a precedent only really for the fact that the Treasury treats Parliament with contempt when it comes to providing full information on legislation. It is about time that Parliament stood up to the Treasury. I urge noble Lords to support my noble friend’s Amendment 38.