National Insurance Contributions (Secondary Class 1 Contributions) Bill

Adnan Hussain Excerpts

Committee of the whole House & 3rd reading
Tuesday 17th December 2024 Commons Chamber

[Aphra Brandreth (Chester South and Eddisbury) (Con)]

Let me begin by drawing attention to my entry in the Register of Members’ Financial Interests.

I support the amendment tabled by my hon. Friend the Member for Grantham and Bourne (Gareth Davies). Increasing employers’ national insurance contributions will be hugely detrimental not only to businesses, but to employees in my constituency. I have been contacted by many local businesses which have expressed disappointment about the Chancellor’s breaking of her manifesto promise not to raise national insurance contributions, anger that it has been done without a full realisation of the consequences for the wider economy, and fear that they may not be able to weather the impact of this decision. I want to take a few moments to share with the Committee some examples of organisations in my constituency that have reached out to me to explain why these amendments are so necessary.

Bradley Barns is a family-run nursery school in Malpas which provides full day care and early years education for nearly 80 families from the local community and surrounding areas. Access to quality childcare provision is vital for the many parents and carers who need to balance jobs with family life. Of course, Bradley Barns hugely values all its employees, and is keen to be the best employer it can be. It currently employs 24 staff whose skills, time and care are vital to children during their formative years. However, while the impact of the Bill might force some businesses to lose staff, in the nursery sector, where the child-to-staff ratio is so critical—indeed, it is a legal requirement—Bradley Barns cannot do that, and nor would it want to. Matt and Vicky, who run Bradley Barns, tell me that as a direct result of this policy, they will now need to find an additional £2,600 every year for each person whom they employ.

The Government made clear in their manifesto that they would not tax working people, so who exactly does the Chancellor think will be paying for her decision? It will be working people in Chester South and Eddisbury and across the country, and at many nursery schools like Bradley Barns they will be left with no option but to increase fees. For some families, the increase will not be affordable: that is the harsh reality of the Government’s choice.

I also want to highlight, as others have, the impact on the many hospices that provide vital support and care for people at the most vulnerable time in their lives. I recently visited St Luke’s Hospice and the Hospice of the Good Shepherd, two of the wonderful hospices caring for individuals and families throughout my constituency, and met their leaders and staff. We know about the funding challenges that such hospices already face. They rely on the good will and generosity of so many people who donate. This ill thought-through Bill will add substantially to their costs, and none of us wants to see them forced to cut services or reduce the level of care that they provide. I sincerely hope that hospices, and the people for whom they care so brilliantly, do not pay the price of this policy, and that the compromise suggested by my right hon. Friend the Member for Gainsborough (Sir Edward Leigh) is considered.

So many business have contacted me to share their concerns about the detrimental impact of this decision. It will be felt by community pharmacies, by GPs who may be forced to compromise on the care they provide for their patients because they are not eligible for employment allowance, by care providers and by nurseries.

[Mr Adnan Hussain (Blackburn) (Ind)]

The hon. Member has mentioned GPs. Blackburn has one of the highest numbers of patients per GP in the UK. Not enough appointments are available, which places a huge strain on the Royal Blackburn Teaching Hospital, and only last week the hospital was put on red alert. Does the hon. Member agree that increasing national insurance contributions will mean fewer GP appointments in Blackburn, that the hospital—which is already in a dire state—will be in an even worse position, and that the situation will get out of control?

[Aphra Brandreth]

That is an important point. These are the unintended consequences that must be considered, and this is why we really must consider the amendment. The impact of the Bill will be felt throughout the economy: it poses the risk of higher inflation, and it will mean fewer employment opportunities. This decision affects businesses both small and large, it affects our local and national economy, and it affects employees who will not enjoy a pay rise or, worse still, will potentially lose their jobs.

VAT: Independent Schools

Adnan Hussain Excerpts

Tuesday 8th October 2024 Commons Chamber

[Munira Wilson]

I think many of us—certainly on this side of the House—would recognise the point my hon. Friend makes, and many have already made it. I suspect that quite a few people on the Government Benches would also recognise that this policy will be a real challenge, because Members from all parts of this House have been turning out in vast numbers at any debate on special educational needs to discuss the major crisis in our state school provision for SEND pupils. The system is broken, and it will have further pressures still.

I come back to the point I was making on partnership working. The sort of exemplary work I was talking about benefits children in the state and independent sectors, and we want to see it become the norm in every part of the country. I fear that it will be one of the first things to suffer when schools are forced to make cutbacks under the Government’s policy. Let us remember that most independent schools are no Eton or Winchester; 40% of them have fewer than 100 pupils. Those small schools, often in rural places, will struggle to absorb this extra cost.

[Mr Adnan Hussain (Blackburn) (Ind)]

Does the Member agree that the policy threatens the viability of many independent schools that have charitable status and serve deprived communities, including many independent schools in Blackburn, such as faith schools and those schools serving children with special educational needs? This policy will put those schools on their knees and vastly increase the number of spaces that will be required in public schools. In Blackburn, we do not have those spaces.

[Mr Speaker]

I gently say to the Liberal Democrat spokesperson that you have now been going 18 minutes. [Interruption.] No, let me finish before you make a judgment call. I do not want you to speak for longer than the Government Minister, and we are shortly in danger of doing that. I am sure you will be coming to the end of your speech.

Independent Schools: VAT and Business Rates Exemptions

Adnan Hussain Excerpts

Tuesday 8th October 2024 Westminster Hall

[James Murray]

I will make some progress first. That is why, to help fund those improvements to our state schools, we have made the tough but necessary decision to end tax breaks for private schools. At the July statement, the Government announced that as of 1 January 2025, all education services and vocational training provided by a private school in the UK for a charge will be subject to VAT at the standard rate of 20%. Any fees paid from the date of the 29 July statement, relating to the term starting in January 2025 onwards, will be subject to VAT. As hon. Members know, the Government also announced that private schools in England with charitable status would lose their eligibility for business rates charitable rate relief from April 2025, subject to parliamentary passage of the legislation.

Those changes were set out in a technical note published online, alongside draft VAT legislation, which formed a technical consultation. As part of that consultation, the Government, at both official and ministerial level, engaged with a broad range of stakeholders, including the devolved Governments, to make sure that we understand the impact of the policy in each nation of the UK.

We have listened carefully to the points people have raised with us. We recognise that, while this policy will raise revenue to help support improvements in the state education sector, it may lead to increased costs for some parents and carers whose children are in the private education system. Let me be clear that while private schools will now be required to charge VAT on the education services and vocational training they provide, we expect most private schools will be able to absorb a significant proportion of this new VAT charge to keep fee increases affordable for most parents. They will be able to make efficiencies and recover the VAT they incur on the things they buy.

[Mr Adnan Hussain]

Will the Minister give way?

[James Murray]

I am going to make some progress. Those recovered costs can be used to offset the increases to feepayers. We are already seeing that some schools have committed to absorbing the VAT liability entirely, while others are choosing to cap fee increases at 5% or 10% to keep fees as low as possible for parents. Members have asked today why we will introduce this policy in January 2025. The reason for doing so is simple: we want to raise the funding we need as soon as possible to deliver our education priorities to state schools across the country.