National Insurance Contributions Bill

Debate between Mike Wood and Sarah Olney

3rd reading
Monday 6th September 2021 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

I rise to speak to my new clause 4, which would quadruple the employment allowance from £4,000 to £16,000 for two years. I tabled it for several reasons. The Government’s Bill rightly identifies that changes to national insurance contributions for both employees and employers have a role to play in stimulating economic activity. That is why they wish to have special NI provisions for freeports and, elsewhere in the Bill, for veterans, to help them back into work and stimulate economic activity in freeports. Interestingly, the Government are indicating in this Bill that they see a role that national insurance contributions can play in stimulating economic activity. I will not labour the point, because Madam Deputy Speaker has made the rules clear on that, but we expect to see further announcements later in the week on NICs, which I think will contradict what this Bill is seeking to do.

NICs have an important role to play in stimulating economic activity, and I wish to speak particularly about our small and medium-sized enterprises. So many of them have been hit badly by the pandemic, especially those in our retail, hospitality and tourism sectors. One thing that many of us here can agree on is that as we come out of the pandemic we expect to see some big changes to the way business operates. We expect possibly to see more online working and more working from home, and we may well see new businesses come in to replace old businesses that did not survive the pandemic to deliver the new services that will support new ways of working and perhaps new ways of living. People will live further away from town centres. What new opportunities will there be in suburban constituencies such as mine, and even rural constituencies, to deliver services for people who would not previously have spent as much time there? So this is an interesting time, but I believe the Government should, above all, be prioritising economic growth and most particularly employment at this stage.

[Mike Wood (Dudley South) (Con)]

What assessment has the hon. Lady made of the cost to the Exchequer of her new clause?

[Sarah Olney]

I have not made an assessment of the cost, but that is partly because it would be difficult to manage that against the extent to which my proposal could, as I said just a minute ago, stimulate the economy, which is what we should prioritise at this time, particularly for small and medium-sized enterprises. If we can, we should stimulate SME growth, particularly in new sectors that may well benefit from changes in the way we do business in this country. The hon. Member for Gordon (Richard Thomson) commented in particular on businesses that pursue carbon-free ways to deliver goods and services, which are such a priority. These are big areas for growth and we should be pursuing them.

In particular, we should support employment in new industries. In the past few weeks we have seen a great deal about skills shortages. We really need to improve skills development in existing industries—we have seen massive skills shortages in respect of drivers of heavy goods vehicle and care workers—but there are also lots of opportunities in the new industries and particularly in the green economy. We really need to support employment and encourage people to develop the skills they need to take their place in what I think will be the new, future economy.

[Mike Wood]

rose—

[Sarah Olney]

I would like to make some progress, if that is okay.

We should at this time pursue economic growth and job creation above all other concerns, because we face an uncertain few months in our economy. We could face a wave of closures and redundancies as the various support schemes that the Government introduced to get us through the pandemic come to an end. There could well be lots of redundancies as the furlough scheme closes. Business rates exemptions and deferred VAT payments are coming to an end, so if we can reduce the pressure on businesses by relieving them of some of their national insurance payments, that will help them to ride out the coming period when they will need to repay some of the costs. VAT on hospitality is going back to 12.5% from the end of this month. All such financial pressures are coming at a time when we think prices will rise and the universal credit cut may well hit household incomes and supress demand.

I propose new clause 4 because instead of a selected NICs cut for companies in freeports, I would prefer that we target the cut at SMEs, at this urgent time when we want to stimulate economic growth and support employment.