Employer National Insurance Contributions: Small Businesses in Hampshire

Alex Brewer Excerpts

Wednesday 2nd September 2026 Westminster Hall

[Paula Barker (in the Chair)]

I will call Alex Brewer to move the motion, and I will then call the Minister to respond. I remind other hon. Members that they may make a speech only with prior permission from the Member in charge of the debate and from the Minister. As is the convention for 30-minute debates, there will not be an opportunity for the Member in charge to wind up.

[Alex Brewer (North East Hampshire) (LD)]

I beg to move,

That this House has considered the impact of changes to employer National Insurance contributions on small businesses in Hampshire.

It is an honour to serve with you in the Chair, Mrs Barker. I am equally privileged to be joined by a number of local business owners from North East Hampshire, who are in the Public Gallery.

Soaring energy costs, a business rates system in desperate need of overhaul and, perhaps the most damaging of all, a rise in employer national insurance contributions: individually, any one of those changes would be hard for a small business to absorb, but together they are too much for many small businesses across Hampshire. When a small business’s costs rise, that cost moves on to workers through stagnant wages, to customers through higher prices and to the business owners in lower profits. When the numbers simply cannot add up, the cost also moves on to local communities, through weaker local economies and hollowed out high streets. In Hampshire, where almost 98% of businesses are small businesses, that is felt by an entire county.

Small businesses cannot design their way around these tax changes. A big national chain can negotiate volume discounts, restructure its human resources or draw on a financial buffer; a beauty salon in Church Crookham or a care home in Ewshot cannot. That is why 35% of small firms say that they are planning to close or significantly scale back this year, and why these changes are, in plain terms, a jobs tax.

This matters because these are precisely the employers we need. The Government’s own research has warned that without urgent action, one in six young people could soon be a NEET—somebody not in education, employment or training. Hospitality, retail, personal care and customer service are the sectors facing the steepest rise in labour costs, yet they are the very sectors that traditionally give young people their first, vital experience in the world of work.

[Dr Danny Chambers (Winchester) (LD)]

A couple of weeks ago, I visited a business called Squeaky Clean run by Sam in Winchester. What was striking about that business was the number of students, young people and sixth-formers it employs, giving them their first job, getting them a CV and teaching them what it is like to work—to turn up on time, to take responsibility—before they go on to university and do other things. Sam told me that the single biggest difficulty she faces in keeping that business going is the rise in national insurance. Does my hon. Friend agree that we should be looking at this as a matter of urgency, not just for those businesses but for young people’s opportunities?

[Alex Brewer]

I wholeheartedly agree. That is the exact crux of the issue, and it is borne out in the data. The Bank of England decision-maker panel revealed that 46% of firms nationally have cut staff because of these changes, and that 20% have paid lower wages than planned. Nationally, small businesses account for 60% of private sector employment, so when they pull back it is not a footnote to the labour market; it is the labour market.

Nowhere is that clearer than in the hair and beauty sector. Kerry Mather has run KJM Salons in Fleet for 36 years, employing around 20 people including six apprenticeships, training a new generation in a key town centre location. In the past decade, apprenticeships in the UK hair and beauty industry have dropped from nearly 19,000 to 3,000. If we are not careful, soon there will be no apprenticeships left.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for securing this debate and I will echo both what she has said and what the hon. Member for Winchester (Dr Chambers) said in his intervention, because the situation is the same in Northern Ireland.

According to the Northern Ireland inter-departmental business register, small businesses and microbusinesses make up the vast majority—about 90%—of Northern Ireland’s local economy, with almost 83,000 registered businesses employing fewer than 10 people. These businesses are not faceless conglomerates; they are the family-run corner shops, local butchers and small builders across my constituency and the constituency of the hon. Member for North East Hampshire (Alex Brewer).

Echoing the hon. Lady’s opinion, the Federation of Small Businesses Northern Ireland has explicitly warned that these surging costs are forcing independent retailers to slash staff hours, cut back opening times and put growth on ice. Does she agree that this issue lies on the shoulders of Government and of the Minister in particular, and that this anti-business policy must stop before it pushes vital high street traders to the wall?

[Alex Brewer]

I thank the hon. Member for his intervention and I agree that this is a matter for Government, which, of course, is why I am raising it today.

The pressure compounds, of course, where a workforce is already stretched. Vehicle repair already loses around 1,700 workers a year. The Institute of the Motor Industry says:

“Protecting that workforce is not just a matter for bodyshops and garages—it is a matter for insurers, fleet operators, and ultimately for every driver who needs their vehicle repaired.”

Foster and Heanes, a name that is well known in North East Hampshire for providing MOTs and repairs, sits squarely in the path of that shortfall. Where there are no staff available to repair a vehicle, the consequences ripple out to every tradesperson who needs a van back on the road and every local supply chain that depends on vehicles moving on time. In a constituency with limited bus infrastructure, the school run is also affected, because for many families there is no alternative but to use a car.

As my hon. Friend the Member for Winchester (Dr Chambers) and the hon. Member for Strangford (Jim Shannon) have said, such business challenges are of course felt across the country. Some 69% of businesses cite employer national insurance contributions as one of the top three cost threats to UK labour market competitiveness, while business confidence has fallen—even since the market turmoil of autumn 2022, which is a really damning indictment of this policy. A quarter of firms cut back investment in the very quarter that these changes took effect, making it no surprise that growth under this Government has never once crept above 0.6%.

The policy is just so hard to understand given the rhetoric used by this Government. There is talk of growth, talk of apprenticeships and talk of opportunities for young people, but the action seems to be the opposite—fewer jobs, fewer apprenticeships, less business investment and an economy that continues to stagnate. Small business owners need to understand how the Government can justify this policy.

Nowhere is the policy harder to defend than in health and social care. This year alone, independent care providers have been billed an extra £940 million. Ministers point to additional social care funding, but for providers on the ground that funding is little more than a consolation prize, because the Government voted down every single Lib Dem amendment tabled in the House of Lords to exempt care and early years providers from this rise. It has landed on a sector that is already in profound crisis and that simply cannot reduce its workforce to cope.

Hundreds of thousands of people are currently waiting for care, many of them stranded in hospital beds simply because the care they need is not available, which piles more strain on to the NHS. Liberal Democrat analysis found that almost 900,000 people had their request for care denied in the last financial year, while—tragically—a further 6,000 people died while waiting for their care to be approved. This policy does not simply squeeze care providers’ margins; it deepens a crisis with a real human cost.

That gets to the very heart of the matter. At the centre of this situation, as local business owners in North East Hampshire have told me, are people. Good employers who pay their staff a fair wage, who train and invest in their teams and who contribute to the communities in which they operate are being squeezed to breaking point.

Having barely recovered from the covid years, service and retail businesses no longer have the financial buffers they once had. That means their staff lose out not just on a pay rise but on a Christmas party or a team training day, or perhaps their equipment is not replaced as regularly or they do not get a bonus. Whatever the consequence, it is people who are impacted—the ones who this Government claim they want to support.

Hampshire’s experience and the national picture are one and the same story, but none of this was inevitable. The Office for Budget Responsibility itself says that firms will pass on 60% of the higher costs, whether through reduced wages or higher prices. Coupled with five consecutive years of falling living standards, the changes to NICs are nothing short of regressive.

There is no doubt that our public services need funding and that our country’s infrastructure needs urgent repair, and I am the first to call for those things, but there is a fair way to do this—and one that will not strangle the UK’s economic growth. The Government must focus on taxing those with the broadest shoulders so that they contribute more through a higher digital services tax, on overhauling the broken business rates system, on ensuring that enormous multinational corporations are paying their fair share for doing business in the UK, and on reversing the Conservatives’ banking tax cuts.

Positive change is possible. The Government’s steps towards cross-party discussions on social care and the 20% cut in business rates for pubs, clubs and music venues are welcome, but we must go further. Any relief to those sectors cannot leave NICs off the table. Today and every day, I represent the brilliant North East Hampshire business community. Small businesses are the engine room of the British economy, so I call on the Government to give them the certainty they need to invest, grow and create jobs. Our businesses should be thriving, not barely surviving.

Rural Pubs: Fiscal Support

Alex Brewer Excerpts

Wednesday 17th June 2026 Westminster Hall

[Alex Brewer (North East Hampshire) (LD)]

Like my hon. Friend’s constituency, mine has beautiful countryside pubs but they are struggling. Pub owners have told me that this year is worse than the covid years. They face closure, despite being the only place for communities to meet in rural areas, as in many others. Does my hon. Friend agree that we must overhaul the entire business rate system to give pubs the support they need to thrive, not just barely survive?

[Claire Young]

I absolutely agree. I could also highlight many other anomalies that affect the wider hospitality and attraction industry.

At the Horseshoe in Chipping Sodbury, I met Matthew Lewis of the Independent Pub Alliance. The ask from the pub trade is not complicated: stability, fairness and a Government who understand that these businesses are part of the community infrastructure. I urge the Minister to meet the alliance to better understand its ask, and I would be delighted to bring Matthew to meet him. My constituents value their rural pubs, as do I and my party. Will the Government show that they do, too?

Spring Statement

Alex Brewer Excerpts

Wednesday 26th March 2025 Commons Chamber

[Rachel Reeves]

As I have set out, the Office for Budget Responsibility does not assume in its numbers any changes in people going back to work. That is what we are going to work on, between the OBR, the DWP and the Treasury, over the summer, so that we develop those plans to ensure that people are not worse off but better off because they can progress into jobs that suit their abilities and needs. We want more people to have the fulfilment of a good job, with security, that pays a decent wage.

[Alex Brewer (North East Hampshire) (LD)]

In a statement with significant problems, I welcome the Chancellor’s commitment to better military homes, which the Liberal Democrats have been calling for. Will she clarify how much and by when, and will that commitment include RAF Odiham in my constituency—or is it just for the constituencies that she listed, which happen to have Labour MPs?

[Rachel Reeves]

We support military families wherever they are based in the United Kingdom. We will set out more detail in the spending review in June. In the past few months, we have already taken back into the public sector homes that were previously contracted out to the private sector so that we can make improvements to military accommodation, which I know will be welcomed in the hon. Lady’s constituency and by military families across our country.