National Insurance: GDP

Lord Altrincham Excerpts

Thursday 19th December 2024 Lords Chamber

Asked by

[Lord Altrincham]

To ask His Majesty’s Government what assessment they have made of the impact of the increase in National Insurance contributions for employers on gross domestic product growth.

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

My Lords, the £22 billion black hole left by the—

--- Later in debate ---

[Lord Livermore (Lab)]

The £22 billion black hole left by the previous Government meant we had to make very difficult decisions to repair the public finances, rebuild public services and restore economic stability. Following the Budget, the Office for Budget Responsibility has revised up its growth forecasts for the next two years, as has the Bank of England. The OECD now expects the UK to be the fastest-growing European G7 economy. The OBR has also said that there will be significant increase in growth as a result of the Budget over the longer term.

[Lord Altrincham (Con)]

I wish the Minister a happy Christmas, even with the reminder of the schwarzes Loch.

Memories of Christmas past and the story of A Christmas Carol remind us that extracting the most amount of money from a business can have surprising consequences. In this case, can the Minister comment on whether increasing employment costs will lead to an increase in prices or a reduction in jobs, and can he specifically comment for us on the impact on the hospice sector?

[Lord Livermore (Lab)]

I wish the noble Lord a merry Christmas and a happy New Year in return. As I said, we did have to clear up the mess that we inherited, and that did mean taking some very difficult decisions. I of course understand and respect the legitimate concerns that have been raised, and we have consistently acknowledged that there will be wider impacts as a result of the decisions that we have taken. But I do genuinely say that not to act and not to repair the public finances and restore economic stability was simply not an option. As I have said, let us be clear: following the Budget, the OBR, the Bank of England and the OECD have all revised up their growth forecasts.