National Insurance Contributions (Secondary Class 1 Contributions) Bill

Baroness Noakes Excerpts

Committee stage
Thursday 6th February 2025 Grand Committee

Moved by

[Baroness Noakes]

54: Clause 3, page 1, line 20, at end insert—
“(2A) After section 1(2), insert— “(2A) If the person is a public authority, the amount of the employment allowance in subsection (1)(2)(a) is £20,000.(2B) A public authority means any person whose activities involve, wholly or mainly, the performance of functions (whether or not in the United Kingdom) which are of a public nature.””Member’s explanatory statement
This amendment would give a higher employment allowance to persons carrying out functions of a public nature.

[Baroness Noakes (Con)]

My Lords, I will also speak to Amendments 55 and 56. I thank my noble friend Lady Neville-Rolfe for adding her name to these amendments.

They deal with two aspects of the employment allowance: public authorities and the employment of people with personal or household care. We heard earlier in Committee that, under the National Insurance Contributions Act 2014, the employment allowance is not available to public authorities and that the term “public authority” includes bodies in the private sector whose activities are at least 50% the performance of functions of a public nature. GPs and NHS dentists have been cited as among those caught by this definition. Amendment 55 would remove this exception for public authorities so that they would be able to claim the employment allowance and Amendment 54 would create a £20,000 level of employment allowance for public authorities.

The effect of this Bill is that all public authorities will pay the higher rate of national insurance calculated on the lower secondary threshold, but none of them will get an employment allowance. Amendment 55 would give them an employment allowance of £10,500, while Amendment 54 would increase that to £20,000. We know that the Chancellor intends to spend around £5 billion each year on reimbursing public authorities, which are classified to the public sector. Since my amendment would reduce the national insurance costs borne by those public sector authorities, it would simply reduce the amount of money that the Chancellor would have to reimburse in her money-go-round and offer a practical benefit for public authorities in the private sector. This would not be a full exemption, which the noble Lord, Lord Scriven, has argued for in relation to GPs and dentists, but it would soften the blow of the national insurance increases. If there ever was a justification for excluding GPs and dentists from the employment allowance, that went out of the window when the Chancellor introduced her jobs tax.

--- Later in debate ---

[Lord Livermore (Lab)]

In conclusion, the Government have provided £4.7 billion of funding to support public sector employers with increased employer national insurance. Expanding eligibility for, or increasing the value of, the allowance would come with additional costs and would reduce the revenue generated by this Bill; this would then require either higher borrowing, lower spending or alternative revenue-raising measures. In the light of these points, I respectfully ask noble Lords to withdraw or not press their amendments.

[Baroness Noakes (Con)]

I am not going to thank the Minister for that reply because he has given us no more information and no justification for why employers who employ people for domestic or household care should not get the employment allowance. He has given no explanation as to why private sector public authorities do not get an employment allowance, other than it was put in the 2014 Act. Both these categories are significantly affected by the other contents of this Bill, so I had hoped that the Minister would respond with some rationale for why the Government think it is right that these categories of employer should not qualify for the employment allowance.

This is rather typical of the way in which the Minister has conducted the whole of this Committee. Since this is the last time we will speak in it, I would like to record that it has been more than disappointing. We normally expect Ministers to give us, or offer to provide, information. We do not normally expect Ministers simply to repeat, parrot-like, three or four set lines that are shuffled for whatever the particular amendment is, but that is what we have received. We are in Committee, so I will of course beg leave to withdraw my amendment, but I would like to record that this is no way to run a Committee.

Amendment 54 withdrawn.