National Insurance Contributions (Secondary Class 1 Contributions) Bill

Debate between Baroness Kramer and Lord Leigh of Hurley

Committee stage
Wednesday 29th January 2025 Grand Committee

[Lord Leigh of Hurley (Con)]

My Lords, I think that I had reached the conclusion of my remarks, which is that I support these amendments. I particularly support impact assessments.

Before I sit down, I just make the comment that it is somewhat strange to note that we were voting on something in the Chamber of the House relating to boxes in the Royal Albert Hall, but we are deprived of the opportunity to vote on the matter of national insurance rises for every company in the UK. That seems to me to be somewhat absurd.

[Baroness Kramer (LD)]

My Lords, I stand as a winding speaker but also as someone who attached their name to Amendment 22 from the noble Lord, Lord Londesborough, which I think gets to the heart of the problem that we have with this Bill. To me, the most pernicious measure has been the dropping of the threshold, which has meant that trapped into employers’ national insurance contributions are the lowest paid and the part-timers. There is a disadvantageous impact on small businesses in hospitality and tourism, which are the backbone of so many communities and employ so many people for whom other work is very difficult to find. That makes it a really significant amendment, and I was very glad to attach my name.

I talked on an earlier set of amendments, essentially, about small businesses but also, more broadly, about tourism, hospitality and part-timers. I will not repeat that; the Committee has listened to me once on those issues and certainly does not need to hear me twice. I just make a small comment on why I am particularly concerned about the approach to small businesses, which is that it seems to me that the Government have put in some protections for what are genuinely micro-businesses but do not use “micro” and instead keep using “small”. The noble Lord, Lord Londesborough, identified the benchmark, which is about seven employees. Then you can start to do better under the changes that the Government have made. However, every time I read about the growth agenda, it requires the upscaling of our small businesses. This, in many ways, has been the British disease.

I was looking at reports from the ScaleUp Institute, which obviously does excellent surveys so you can get a granular feel of what is happening with many of these businesses. Most of them state that the first problem in scaling up is talent, but the second problem is access to finance. For a company that will now have to take on board additional costs—about £1,000 or more per employee—this will exaggerate that problem of access to finance. Many of them will now have to find finance in order to be able to cover the working capital that is engaged in paying higher employers’ national insurance. The noble Lord, Lord Forsyth, in his excellent and interesting Second Reading speech, covered some of the issues associated with that credit.

--- Later in debate ---

[Lord Leigh of Hurley (Con)]

I just ask: what are the Government afraid of? This is a sensible suggestion about assessing what the effect might be of an enormous change to every business and charity organisation in the country. If it is such a good thing—we are told that it is—verify it.

[Baroness Kramer (LD)]

My Lords, I shall be extremely brief. It must be galling for the Minister to sit here and be lectured by the Conservative Benches because he and I so often tried to obtain information and were consistently denied it. The noble Baroness, Lady Noakes, asked why there was not a greater outcry. Everybody just got so used to being denied information.

I am sure that the Minister will also be able to cite many economic crises when information was not provided—I have to say, the silence on the Conservative Benches in not calling out for that information was very loud, if I can put it that way. I am sure that, if the Conservatives were back in government again, we would get the same absence of transparency and limitations on information. There are perhaps two honourable exceptions—the noble Baronesses, Lady Noakes and Lady Neville-Rolfe—who stood out against their party when every other voice was one that co-operated in that silence.

That silence was part of the reason why there was so much mistrust of the Conservative Government in the end; it was part of their undermining. As the Minister and his Government start to look at reform, which they are looking at more generally—particularly in dealing with the Civil Service—looking for opportunities for transparency would be a really positive move. With information, we stand on more secure ground. Will he consider that? I have asked him that before.

It is realistic to understand that we are unlikely to get impact assessments ahead of the actions that the Government contemplate doing in the next few weeks, or just in the next couple of months, but post reviews are at least a place to begin. They shed light, and they help both the Government and Parliament to understand where things have been effective and where they have not. If the Minister feels that he cannot accept these kinds of requests for immediate impact assessments, will he consider seriously the various requests made in other groupings for post-facto analysis and review?