Employment Allowance (Increase of Maximum Amount) Regulations 2020

Baroness Anelay of St Johns Excerpts

Tuesday 5th May 2020 Lords Chamber

[Baroness Anelay of St Johns (Con)]

My Lords, I thank the Minister for her explanation of the regulations before the Virtual Proceeding today. Like the previous two speakers, I support the changes being made; they are a way of trying to incentivise business. However, I have a couple of questions for my noble friend about their potential impact on charities. Last Thursday, the House debated the impact of Covid-19 on the ability of charities to continue their valuable work. Noble Lords gave examples of how charities vary considerably —really widely—in their ability to gain funding, the number of their employees and volunteers, their turnover and in the specific area of activity that they focus on.

Large or small, they are all now facing huge financial losses incurred by the immediate loss of income during lockdown from charity shops and fundraising events. I do realise that the Government have already taken significant measures to reduce the impact of Covid-19 on the ability of charities to survive and function effectively, while also taking into consideration the wider financial consequences for the Treasury. My noble friend Lord Wei has just remarked on the fact that the proposals before us today were forecast in the Conservative Party manifesto, long before anybody thought that this appalling pandemic might be on its way.

As has been said already, these regulations increase the maximum amount of the employment allowance by £1,000 to £4,000. However, the regulations also change employment allowance rules in order to exclude employers whose national insurance contributions liability in the previous tax year was over £100,000. I note that the section “Impact on business including civil society organisations” does not refer to the possibility of losers among charities. Of course, regulations covering businesses cover charities. Do any of the larger charities in this country fall within the category of those organisations which will now be excluded from this new scheme by these regulations, having previously qualified? Did any charities take the opportunity to respond to the Government’s consultation, either directly or through a representative? If so, were those representations confidential or are they available for public view online?

I ask because the Government’s online section on this, headed “Detail of outcome”, is a very brief— I am being generous—three paragraphs, all of which are general in their comments. They do not mention charities, which is why I am pursuing this point. The change of course will be welcomed by those charities which qualify for this increase to £4,000. Have the Government calculated how many charities might benefit from that change?

I note that the consultation period on the regulations we are considering today was last summer, closing on 19 August, and the regulations themselves were made on 11 March and laid before Parliament on 12 March. That means they were in final form by the time the director-general of the World Health Organization announced on 11 March that Covid-19 was officially recognised as a pandemic. Have the Government received any further comments on these regulations since the start of the Covid-19 pandemic was recognised?

My noble friend will be aware that last month the OBR calculated that GDP would contract by up to 12.8% for this year as a whole, taking into account what we hope will be a bit of a bounce-back for the economy during the late summer and autumn. Accordingly, will the Government keep their position on the employment allowance regulations under review during the rest of this year, as the impact of Covid-19 on the economy becomes clearer and appropriate adjustments could be made?

I say that because I notice that in the explanation of the regulations it says, under “Monitoring and evaluation”:

“The measure will be monitored through information collected from receipts.”


It might also be valuable, therefore, to not only look at that but to receive further representations from charities which find themselves—unexpectedly now, perhaps—excluded from the opportunity to benefit from the regulations today. I look forward to my noble friend’s responses.