National Insurance Contributions (Secondary Class 1 Contributions) Bill

Baroness Lawlor Excerpts

Committee stage
Tuesday 4th February 2025 Grand Committee

[Baroness Kramer (LD)]

My Lords, we consider these areas so important that employers’ national insurance contributions should not be changed from the current formula. Our position remains unchanged. We discussed it extensively in both substance and detail on the first two days in Committee, and I would not try the Committee’s patience by repeating all the arguments that were made from these Benches.

[Baroness Lawlor (Con)]

My Lords, I support these important amendments. Today, all three and four year-olds in England are entitled to free education before they start school full time at the age of five. In the year 2023-24, there were almost 23 children for every teacher—the highest ratio thus far. If we continue with this measure without amendment, we will see an even higher ratio, with the number of adults declining because of the costs, as we heard previously in Committee and again today. We have 3,100 nursery schools and 11,700 day nurseries, and they play an integral part in the induction of little people into the world of education. They are vital to the well-being of the child and, indeed, to parents being able to pay their way with confidence that their children are receiving an early years education. I urge the Minister to provide an exemption, or to ensure in one way or another that early years education and care providers, whether in a nursery school, a day nursery or another system—voluntary and independent, as well as public sector—are prevented from losing teachers due to the additional costs.

I echo what my noble friend Lady Neville-Rolfe said. I would be very happy with an increased employment allowance. We need an impact assessment, given the large number of people employed in this sector and the impact this measure will have on children’s education later in life. We are now paying the price of the Covid lockdown, with the children who passed through schooling at that age. Let us stop making things difficult for early years provision and try to improve it, not disimprove it by such a measure.

[Lord Livermore (Lab)]

My Lords, I will address the amendment tabled by the noble Baroness, Lady Neville-Rolfe, which seeks to prevent commencement of this Bill until an impact assessment is published for the early years sector.

Delaying commencement of the Bill would reduce the revenue generated from it and require either higher borrowing, lower public spending or alternative revenue-raising measures. The Government carefully consider the impacts of all policies, including the changes to employer national insurance. As I have stated previously in Committee, an assessment of the policy has been published by HMRC in its tax information and impact note, including impacts on the Exchequer, the economy, individuals, households and families, equalities and businesses, including civil society organisations, with details on monitoring and evaluation.

Further, the OBR’s economic and fiscal outlook sets out the expected macroeconomic impact of the changes to employer national insurance contributions on employment, growth and inflation. The Government and the OBR have therefore already set out the impacts of the policy change. This approach is in line with previous changes to national insurance and taxation, and the Government do not intend to provide further impact assessments.

Amendment 40, tabled by the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Altrincham, seeks to increase the employment allowance for early years providers. This would introduce new pressures which would have to be met by either more borrowing, lower spending or alternative revenue-raising measures. I also note that creating new thresholds or rates based on what sector a business is in would introduce distortion and additional complexity into the tax system.

The noble Baroness, Lady Neville-Rolfe, asked for some specific figures. The figures are not broken down in the way that she asks for.

Early years providers have a crucial role to play in driving economic growth and breaking down barriers to opportunity. We are committed to making childcare more affordable and accessible. That is why, in our manifesto, the Government committed to delivering the expansion of government-funded childcare for working parents and to opening 3,000 new or expanded nurseries through upgrading space in primary schools to support the expansion of the sector.

Despite the very challenging fiscal circumstances the Government inherited, at the Budget the Chancellor announced significant increases to the funding that early years providers are paid to deliver government-funded childcare places. This means that total funding will rise to more than £8 billion in 2025-26.

In light of these points, I respectfully ask the noble Baroness to withdraw her amendment.

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[Lord Altrincham (Con)]

My Lords, I rise to move Amendment 30 on behalf of my noble friend Lady Monckton of Dallington Forest and to support Amendment 51 in the name of my noble friend Lady Neville-Rolfe.

Amendment 30 would delay the commencement of Clause 2 until an impact assessment had been published fully to assess the impact this tax will have on the retail sector, and Amendment 51 increases the employment allowance to £20,000 for that sector.

Retail is important because so many people work in it, not people on average or in aggregate in a Treasury forecast, but hundreds of thousands of individuals, some young, some in their first job, some working part time—as well as their families, their neighbourhoods and their customers—where they bring joy to themselves and to others every day. We know that this Bill will lead to job losses.

When the national insurance increase was first announced, there was an expectation, perhaps a hope, that the cost would be met by price rises or other changes rather than by job losses, but as the weeks have gone by, we know that the increase is being funded by job losses. That is why this impact assessment question is important because part of the impact is happening already. From the initial announcement to today, we already know that the policy is being funded by job losses, so the Bill is creating policy-driven unemployment. All of us in this Room share a little in the responsibility for this, but we should at least be very careful in our actions when we know that the cost will be unemployment.

As the noble Lord, Lord Eatwell, and others have said, we might hope that jobs will be created elsewhere. We must surely, on all sides of this debate, hope for job creation, but that does not change the short-term impact of job losses. Equally, we might hope for productivity improvements—say, the automation of retail—which is important anyway, as the noble Lord, Lord Wolfson, mentioned, but not, alas, if we can help it, at the cost of job losses.

To go back to what my noble friend Lord Leigh was talking about, to where the estimates at best are for those of us who are not in the Treasury, very roughly, it looks as if in retail the national insurance hike could easily lead to a 5% reduction in headcount, and if retail is of the order of 2 million or 3 million people, we could quite quickly get unemployment just from retail of 200,000. If you add a couple of hundred thousand from other areas, we are on the way to half a million job losses that could come from this policy. There was an expression earlier on about what is in scope in taxation and in the tax take. What is in scope here are individuals who will lose their jobs—unemployment is in scope. There are direct impacts on job losses.

The value of our retail sector cannot be understated. In 2024, retail sales in Great Britain were worth £500 billion, and 2.87 million people were employed in the sector: nearly 10% of all jobs in the British economy. That is therefore nearly 3 million people whose jobs will be put at risk due to this tax increase.

One of the great benefits of employment in the retail sector is that there is extraordinary element of flexibility, which allows a great number of young people to work in the sector. As has already been discussed in Committee, those who are paid the least will be affected the most. The noble Lord, Lord Wolfson, mentioned earlier that the cost impact on part-time and often very young workers is a 13% increase. This paints a bleak picture for our young people in the sector. Young people are already a more vulnerable group of people, and I am highly concerned that this tax increase will only paint a bleaker picture for young people trying to enter the job market.

The reduction of the threshold at which employers begin to pay employer’s national insurance to £5,000 will hit part-time employees the most. Given that half of all retail employees are part time, the fact that this jobs tax will bring 1.45 million part-time retail employees into the bracket is a devastating result for a sector that often employs young people.

The retail sector has responded with outcries at this tax that will be imposed upon it, with 81 major retailers writing to the Chancellor expressing concern over the impact the tax will have on the sector that typically operates with a 3% to 5% profit margin. In a survey done by the British Retail Consortium, 56% of chief financial officers said they would reduce the number of hours and overtime they offered their employees. This is why this is a jobs tax because businesses will be forced to cut costs in order to continue, and as such, it will hit workers the most.

I am concerned not only about the impact this tax raid will have on workers but about the impact consumers will face given the survey I mentioned above, where 67% of retailers responded that they would be forced to raise prices.

We in this Room are all aware of the impact that this tax increase will have and of the inevitable factor of creating unemployment. I look forward to hearing from other noble Lords on this issue, and I beg to move.

[Baroness Lawlor (Con)]

My Lords, I support my noble friend and his amendment, which is important. If the Minister will forgive me, we hear the same reply all the time. I do not think that HMRC’s figures, the Budget assessment or the OBR figures that we were given in November or December provide adequate information to sectors facing huge job losses. They need to plan ahead, and these assessments may spur the Government if it is written down in black and white that these jobs will go.

The economist Liam Halligan pointed out in his weekly column in the Sunday Telegraph at the weekend that, according to S&P’s bellwether PMI index of business leaders, firms are cutting jobs at the fastest rate since the financial crisis. He writes that there was a 47,000 drop in payroll employees in December, the biggest monthly fall since lockdown. Those figures were tallied after Sainsbury’s announced 3,000 job losses. At the same time, he wrote that personal insolvencies in England and Wales were up by 14% in 2024, with a huge spike after the Budget. UK company liquidations surged. In 2024, 3,230 companies were shut down under the courts.

Last week, I mentioned the impact on the retail sector. I will not go through it, but it is estimated that as a result of the Budget entirely, which includes the NIC costs, £7 billion will go out of the retail sector. Those figures are staggering. I cannot accept the Government’s blithe assessment. I know that the Minister is sticking to the Treasury line with the statement that the impact assessments published so far are in line with what has been published in the past. We are dealing with a different sort of measure in this NIC Bill. I have been in the House of Lords only since November 2022, but it is the first time in my experience here that we have faced a measure where it is clear to all concerned that there will be job losses on a significant scale. Surely, that should spur the Government to want to provide some kind of impact breakdown for the different sectors, whether they are the charitable, voluntary or caring sectors or in the only area where we will see growth, the private sector. If the Chancellor is so convinced and she and the Government are keen and will produce growth, they should recognise that this will come from the private sector. It does not come from growing the public sector. I hope the Minister will support or think again, as my noble friend proposes, on retail.

[Baroness Kramer (LD)]

My Lords, again, we discussed this area extensively over the first two days in Committee. I particularly recommend to the Committee the amendment tabled by the noble Lord, Lord Londesborough. The Government have put in place protection for microbusinesses. I think the calculation by the noble Lord was right, basically, that it is up to about seven employees. His proposals would put in significant protection for small businesses, those just up from micro and those potentially at the beginning of scale-up, which we need so much in this area. The noble Lord is now in his place, and I am delighted to make those comments in his presence.

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[Lord Jackson of Peterborough (Con)]

My Lords, it is a pleasure to contribute to this, the third day of Committee on this very important Bill. I say at the outset to the Minister and noble Lords that, again, this is a commencement amendment and does not seek in any meaningful way a permanent exemption to this jobs tax. It is merely an opportunity for the Government to think again, based on up-to-date and more contemporary empirical evidence, so that they can study properly a full impact assessment, as the Bill has an impact on a very important part of the healthcare sector: community pharmacies.

The Minister will know that there is significant concern across the whole NHS and the wider healthcare sector about the implications of these fiscal changes for community pharmacies. The figures produced by Community Pharmacy England suggest that these changes alone will generate an extra burden, an extra encumbrance, on community pharmacies of approximately £50 million, even with the changes in the employment allowance. If you strip out the employment allowance, the figure is approximately £74 million. If you add the two other cumulative factors to these fiscal changes, the encumbrance for community pharmacies is going to be very heavy.

Of course, on its own, we welcome the rise in the national minimum wage—we believe that low-paid people should be paid more and have a decent standard of living—but, remember, these burdens are falling on a particular part of the community. This will mean an extra cost of anything between £115 million and £152 million per annum, according to Community Pharmacy England. If you also add in the reduction in the business rates relief as it impacts on operating costs, the overall, universal impact on community pharmacies will be in the region of £200 million—that is, one-fifth of £1 billion.

Let us remember what community pharmacies are: an adjunct to the NHS, in that they are a neighbourhood health service. I accept that Governments have to make tough decisions; in fact, my own party, when it was in government, was not able to support community pharmacies to the level that we would have liked. There has been a real-terms reduction in pharmacy funding from central government since 2015. The lowest number of pharmacies are now open to the public at any time since 2009, which is 16 years ago: 1,250 pharmacies have closed since 2017. What we are talking about today is a policy decision that has at its heart the very viability of this sector.

As noble Lords will know, doctors and dentists are able to defray the costs of their non-domestic rates by direct reimbursement from the National Health Service. That is not the case with pharmacies; in fact, 90% of pharmacies’ work contracts are for NHS reasons and projects, such as dispensing advice and consultancy—principally dispensing.

Let us think about what community pharmacies do for their local communities. They are a lifeline. Flu immunisation, smoking cessation, sexual health services, alcohol misuse interventions, substance misuse services, healthy lifestyles, diet and nutrition, and generic health education—these are all vital functions that community pharmacies carry out. They take a sizeable burden off NHS acute hospital trusts—clinical commissioning groups as was—and, of course, primary care facilities.

They cannot put their prices up. Because they are locked into contractual arrangements, which are fixed, they cannot pass the costs on to the consumer. Often, they cannot make cuts in staffing or the services offered, or make redundancies, without in effect closing the facility—or at least hugely reducing the service that they deliver. They have, over the past 10 or so years, increased service delivery massively. They will put most public services to shame in terms of delivery of productivity in that period; indeed, they are the safety valve for the NHS.

We on this side of the Room are asking not for special favours or for the policy to be junked but for an opportunity for the Government to think again about the special circumstances of community pharmacies. My noble friend Lady Neville-Rolfe made an important point: the impact note that the Minister prayed in aid is out of date. I do not think that it has the up-to-date, topical data that it should have for the Government to properly consider, with the evidence available, the policy.

Incidentally, I should tell your Lordships that, naturally, I support the other amendments in this group: the employment allowance variation amendments, in respect of dentists and doctors, and, of course, Amendment 46 on pharmacies especially.

To conclude, this is about using an evidence-based analysis to create an impact assessment; to review the policy, at least; to inform the fairest and most sensible policy formulation; and to protect the interests of a vital part of our healthcare sector. If we do not do that, it will have a major impact on very vulnerable people who are NHS patients and who use the important services of community pharmacies. For that reason, I ask your Lordships to support this amendment and beg to move.

[Baroness Lawlor (Con)]

My Lords, I support my noble friend’s amendment on pharmacies. We must think of the impact. I have spoken to those who have been impacted already and worry that there is an impact not just on community pharmacies, which employ more pharmacists, but on small providers. When we look at what happens in towns and villages across the country, we see that, when a pharmacy closes down, elderly people, families and people looking for their prescriptions have to take a bus and go somewhere else. The impact on town centres of this sort of change can be quite significant. We have 3,560 independent pharmacies today.

In all of our debates today, we have spoken about the impact on each sector and how it might be alleviated, with amendment after amendment proposed from these Benches and from the Liberal Democrats, who spoke earlier in Committee. Barring retail and hospitality, today’s groups of amendments cover what are usually called public services. They are provided by independent providers. Some, such as the early years and hospice sectors, are charitable as well as independent. If they do not provide these services, there will be greater costs to the taxpayer, and they will do so in a much more bureaucratic and less person-sensitive way. The quality will go down and the cover will be broader; in fact, it will not meet the kind of person-to-person approach that we see offered by many independent providers.

I support my noble friend Lord Jackson because we are talking about people and their jobs: 80,000 pharmacists were employed in 2023-24. As well as them, we are thinking of pharmaceutical technicians, of which there are 34,300. These are real people and real jobs, and they are on top of the jobs that we have spoken about day in and day out in this Committee. I implore the Government and the Minister to think about what happens when people’s jobs go: not only do we as communities lose the services that are vital and which we have spoken about; we see an impact on our streets and our communities, and we increase the cost to the taxpayer—that will go further, in addition to the high hike in borrowing and the tax rises that the Government intend. We will see the further damage that will be caused to the economy. I implore the Government to think again.

[Lord Scriven (LD)]

My Lords, I wish to speak to the amendments in this group; I thank the noble Lord, Lord Jackson of Peterborough, for introducing it. I draw the Committee’s attention to the fact that I am the vice-chair of the All-Party Parliamentary Group on Pharmacy, so this issue is close to my heart.

The noble Lord, Lord Jackson, aptly outlined the pressure that community pharmacists are under at the moment and the issues that they face. He also mentioned a lot of facts and figures from Community Pharmacy England and the National Pharmacy Association, which have outlined the impact that these national insurance contributions will have on community pharmacy. The reason an impact assessment will not work is that the data is already out there, in terms of data from the industry itself. On average, every week, 10 community pharmacists are closing. There is a crisis in community pharmacy, which means that pharmacy after pharmacy in communities up and down this country can no longer survive and is falling by the wayside. An impact assessment would be useful only to reiterate the information that is already out there from the industry; it will not stop organisations falling by the wayside every single week.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Baroness Lawlor Excerpts

Committee stage
Wednesday 29th January 2025 Grand Committee

[Baroness Kramer (LD)]

We will have to beg to differ on that.

I think that the Minister will turn around and say that a great deal is being done for small businesses that want to upscale and that we should look at the British Business Bank. We are talking about an entity that is so small that it really cannot meet this need, so there is a very big problem here to be addressed. It seems to me that the way in which the national insurance contributions increase will work will knock back the effort that has to be made to help people get through what is often known as the credit valley of death, so that they can go from being small to the thriving, upscaled businesses that we need to drive the growth that we need.

[Baroness Lawlor (Con)]

My Lords, I come in just to endorse what my noble friend Lady Noakes said about small businesses and indeed to support these amendments generally. I will speak on my own set of amendments later on with respect to impact assessments.

I founded a small business. Yes, it was a not-for profit-business—Politeia, which is a think tank—but, in 1995, we went through the phase described so well by my noble friend Lord Forsyth of wondering how we would meet employer payroll at the end of every month. From a comfortable position now looking back, we are still not exactly in a rosy situation because, every time policy changes or there are external shocks such as Covid, we face more costs. It is difficult to see how any small business needing to make a profit can do so and expand.

In my case, as someone involved in running a small business, I would say that we have a done a lot of good. It is a not-for-profit charitably funded think tank, but we train graduates and even young people coming straight from school who are finding their place in the job market. We have always paid slightly over the minimum wage once they get on to the payroll, and they go on to do great things: they join the Civil Service; they join the public sector; or they get training contracts and continue working with us, because it helps them to pay the fees for the next phase. We will have to think about that model, because they are going to cost a great deal more. Some of the senior staff earn much more decent salaries than perhaps even the people who founded the organisation do, and we will have to rethink the senior and experienced team because of the enormous hit that we are taking. That is not to mention all the other costs in the Budget.

From the perspective of a very micro-business, this will have serious consequences. I speak as somebody still involved in running it and raising the money. Noble Lords will know that people’s spare money that goes to think tanks such as mine will cease and those people will have to cut their own jobs—that is where the funding comes from. I urge the Government to think again about the proposal from my noble friend Lady Noakes and all the other excellent proposals in this group of amendments.

[Baroness Neville-Rolfe (Con)]

My Lords, I thank all noble Lords who have contributed to this valuable debate, especially those such as my noble friend Lady Lawlor who have run small businesses. Having heard the concerns from noble Lords across the Committee and from across the sectors, I hope that the Minister will consider these amendments very seriously before we get to Report.

We know that this jobs tax will be bad for small businesses. The Government have not provided sufficient information in the light of all the calls from hard-pressed businesses, so more detailed information is necessary. SMEs are more vulnerable, as the noble Lord, Lord Sharkey, said. Even covenants are at risk, as we heard from my noble friend Lord Leigh. The noble Baroness, Lady Kramer, rightly talked about scale-ups being knocked back because of the problems that they are facing. I was particularly interested to hear from the noble Lord, Lord Londesborough, and to see his amendments. He had some very telling questions based on SMEs and on particular examples. I think that the Minister and the Treasury should properly examine some of his spreadsheets and, indeed, some of the other examples raised today, such as by my noble friend Lord Howard of Rising, who rightly talked about international competitiveness, and my noble friend Lord Blackwell, who made a telling comment about the lower-margin sectors, start-up and scale-up.

It was notable that, in her growth speech today, Rachel Reeves had little to say about small businesses and the difficulty that these NICs changes have placed on them. As my noble friend Lady Noakes said, we are imperilling their success—their survival, even, in some cases—and the scale-ups that we need for growth. I detected a good deal of support for her amendment, so I hope that the Minister will bear that in mind. As I have explained, the Chancellor’s speech strengthens the case for an exemption or a concession to help some or all of our smallest businesses to survive and to thrive. I very much hope that the Minister will be able to respond positively.

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[Lord Leigh of Hurley (Con)]

I am most grateful to my noble friend Lady Sater for underlining my point. It is exactly that. People will turn to me and ask, “Well, why should I give to you, Lord Leigh, and your fundraising efforts, because the Government are going to take away much more?”

According to the Charity Commission website, there are 5,435 charities with an income between £0.5 million and £1 million. On average, they make a surplus of just over £13,000 and employ about 12 people. So the increased cost caused by the raise in the NI for people on the minimum living wage, which is a large proportion of such people, will be £997. There are some heroic assumptions in this, but it is not unreasonable to say that the cost to these charities, on average, will be just over £12,000, which wipes out almost their entire surplus.

I accept that those charities will receive employment benefits, so let us look at some of the larger charities. There are 6,000 charities in the £1 million to £5 million range. Interestingly, they raise a total of £13 billion and spend a total of £12 billion, most of which is on salaries. On average, they employ some 35 people and the surplus is just over £19,000. The extra cost to them will be £35,000, which will not just wipe out their entire surplus but push them into deficit.

There are only 1,200 charities with income in the £5 million to £10 million range, and they employ an average of 104 people, so the extra cost to them of the NI burden is £103,000. Their average surplus is £47,900. Once again, their surplus will be completely wiped out and, thanks to the imposition of these extra costs, they will make a loss.

As my noble friend Lady Sater said, the NCVO wrote to the Chancellor, and I note that its letter was signed not just by the NCVO but by 7,360 charities. It employs over 1 million people. Charities deliver benefits to the public sector of some £17 billion a year, so this is distressing, to say the least. My noble friend raised a number of specific charities; she mentioned a local Age UK, with which I do not have any connection. Age UK states:

“This particularly impacts organisations that employ significant numbers of low paid staff … Local Age UKs are warning that these changes will significantly impact their ability to provide essential services to vulnerable older people, particularly in underserved areas”.


In turn, this will have

“a knock-on effect on older people’s health and wellbeing, increasing demands on our already hard-pressed health and social care services”.

I made the point earlier—it was a political point—that the Labour Front Bench does not have as much business experience as it might, although it has many other attributes and qualities. It has a strong and close connection and experience with the charitable sector; there is a good relationship. So why on earth would the Government not accept these amendments to help the charitable sector and save it from these disastrous costs?

[Baroness Lawlor (Con)]

Will the noble Lord comment on a different service that charities provide? For instance, my think tank has often been contacted by government departments asking to have a run of research on, say, intellectual disability and its cost. When I ask the official why they want that, they say, “It would be a very good study, but we couldn’t do it for less than—”, and they tell me the astronomical sum of money that it would cost them to do the same study.

Time and time again, we have demands for all kinds of work, which we have done and published, because we can do it, and we can get the best people to do it. People will give their expert advice and analysis for free. The Government, of whatever complexion, will then benefit. Why have this Government and other Labour Governments not done this? It is like cutting off your nose to spite your face.

Of course, I do not think for moment that the noble Lord, Lord Leong, on the Front Bench opposite, does not have business experience, but charities save taxpayers money and provide the Government with many different types of services.

[Lord Leigh of Hurley (Con)]

I thank the noble Baroness, Lady Lawlor, for that. One of the four charities that I chair is a think tank, so I totally agree with her. In this country, the Charity Commissioners are particularly effective and very good at clamping down on organisations that are not proper charities. So we can be comfortable that any organisation registered with the Charity Commissioners as a charity is bona fide and generates good work, as the noble Baroness said.

I urge the Minister to have a deep think about this and consider an additional exemption for the private sector. An exemption has already been made for the public sector, so it is doable.

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[Baroness Neville-Rolfe (Con)]

My Lords, I start by thanking the Minister for his clarification on the full availability of the employment allowance in respect of charities; he agreed to look into this on day 1 of Committee. The query also related to GPs and dentists, where they were mainly involved in public work; clearly, clarity on those would be helpful too.

In moving Amendment 13, I am particularly grateful for the support of my noble friends Lord Altrincham and Lady Lawlor. My amendment would require the Government to publish comprehensive impact assessments and reviews of the impact of the planned jobs tax. This is the Budget measure with much the most impact on business and the private sector. We know just how burdensome it is from the screams of business and charities. It is vital that the Government calculate and share the impact on jobs, wages, inflation and, above all, growth—the Government’s stated prime mission.

There are established procedures for impact assessments on Bills. Despite the Minister’s resistance, I believe that it is a dereliction of duty not to have provided fuller details of the Bill’s various impacts. When we debated the Bill at Second Reading, my noble friend Lady Sater, who has just left, asked the Government about plans to publish a full impact assessment. In response, the Minister said:

“The tax information and impact note was published on 13 November, alongside the legislation when it was introduced”.—[Official Report, 6/1/25; col. 602.]


I have to say, although it is now available to the Grand Committee, the Printed Paper Office had to do quite a lot of online research after Second Reading to find me a copy. Curiously, it did not seem to have been delivered to it in the normal Bill bundle.

I can understand why there was not a huge rush to make it available. I am afraid that it is a very limited document, to say the least. The note includes no detailed assessment of the impact of the national insurance charge on a number of very important areas—not even a split into three between the effect of the increase to 15%, the new threshold of £5,000 and the revenue cost of the rise in the employment allowance. There is no information on the bureaucratic costs in respect of new personnel for whom NICs will be payable. We must have more detail from the Government before this Bill is considered on Report.

I note that, in response to intense questioning from the Opposition, in a parliamentary reply the Government split the £23.7 billion cost of NICs in 2025-26 into £11.1 billion related to the rise to 15% and £17.2 billion from lowering the threshold to £5,000. This demonstrates that the biggest hit in the Budget relates to the lower paid and part-timers, groups they feign to care a lot about. That is exactly the concern of many of us, including the charities that were the focus of the last group. There is no figure given for the rise in the employment allowance, but I calculate from the available data that it will be £4.6 billion in the first year. Perhaps the Minister could confirm that, or correct me. Could he also put on record the three-way split for the five years addressed in the impact note—in a letter to the Committee, if need be?

My Amendments 13 and 26 call for an impact assessment of the Bill’s impact on jobs, wages and growth. My Amendments 62, 63 and 64 call for a separate review of the impact of this legislation on employment, as well as on jobs, wages and inflation, and another on economic growth. While the Government are leaving us in the dark on the detailed effects of their jobs tax, the Office for Budget Responsibility has said that the national insurance changes alone will reduce labour supply by 0.2% and add 0.2 percentage points to inflation by 2029-30. Does the Minister believe that this assessment is accurate, particularly in the light of subsequent developments and the extraordinarily negative response to the NICs changes across the country? If the Government do not accept the OBR’s figures, can the Minister tell the Committee what his own figures say about the specific impact on jobs and inflation?

At Second Reading, the Minister was also questioned about the impact on businesses. Rather than giving us a detailed answer, we heard the same line from the department that 940,000 employers will pay more in NICs contributions through the jobs tax. If the Committee is to make progress on the Bill, it would be helpful to know exactly which sectors the Treasury expects to be hit hardest and what proportion of employers in those sectors are expected to see their liabilities increase. That is what Amendment 61 requires.

The Government owe it to Parliament and employers and employees in different sectors to explain much more clearly what the effect of the jobs tax will be. Where will it bite, who will it bite, and which sectors will be worst affected? It is a long list—some have already been discussed today—but, looking forward, we are interested in GPs, dentists, social care providers, hospices, small businesses, early years care providers, universities, charities, farms, retail and hospitality. There may be others, but the NICs changes are a blunt instrument, and we need a review clause of the kind that we have seen in other Bills, because of their scale, importance and bluntness. I especially look forward to hearing from my noble friend Lady Lawlor on the employment aspects.

Finally, I draw the Committee’s attention to the Government’s own Guide to Making Legislation which states:

“The final impact assessment must be made available alongside bills published in draft for pre-legislative scrutiny or introduced to Parliament”.


I know that the Treasury has its own rules and does not like to be held to account on finance matters. However, given the enormous effect that the Bill will have on so many businesses, it seems inappropriate that the Government have not published a full assessment in this case, in the same way that they do with other Bills. The decision not to publish an impact assessment is hardly in line with the commitment made by the Leader of the House of Commons in a Written Answer of 17 January. This was a refreshing approach by the new Government, overtaking the practice of the previous Government. In that Answer, she wrote:

“The Government is committed to ensuring Parliament has the information it needs to hold the Government to account and to understand the impact of legislation”.


Transparency is the route to better government, and it is a pity that the full rules for impact assessment on Bills, with an independent Regulatory Policy Committee review, do not apply to the Treasury. I beg to move and look forward to other contributions.

[Baroness Lawlor (Con)]

My Lords, it is a great pleasure to follow my noble friend Lady Neville-Rolfe, and I support her amendment. My amendments in this group are Amendment 15 to Clause 1, on the increase in the rate of secondary class 1 contributions; Amendment 37 to Clause 2, on the lowering of the threshold for secondary class 1 contributions; and Amendment 57, on increasing employment allowances and removing the £100,000 cap. They are aimed at ensuring that an adequate impact assessment is made available to both Houses of Parliament for each of the proposed changes before the Act comes into force and after it has been in operation.

Complications from Abortions (Annual Report) Bill [HL]

Baroness Lawlor Excerpts

2nd reading
Friday 13th December 2024 Lords Chamber

[Baroness Lawlor (Con)]

My Lords, I speak in favour of my noble friend’s Bill. I am a great supporter of patient empowerment, and one sure way to give patients power is to arm them with knowledge and the medical options available to them. Recently, I had a hand procedure for Dupuytren’s disease. In the run-up to the procedure I wanted to know all the evidence available about the condition itself, the treatment, the options, the aftercare, and indeed the complications. I did so partly by talking to a GP and other doctors I knew, but partly by looking at websites.

This simple measure, proposed by my noble friend Lord Moylan, for a report that collates both sorts of data—that from the hospital episodes statistics and that from the ANS—will provide a fuller picture for people like myself. More importantly, it will strengthen the channels of information on the complications arising from abortion. While the annual published statistics may not be read by many people, and rely solely on the ANS data, note will be taken of a report issued by the NHS that collates the full information, both from the medical press and GPs. Levels of public information about possible complications and potential risks will be available. Because the role of medical practitioners in advising about any procedure is rightly deemed central, it is important that, as a result of the measures proposed in this Bill, they will be better informed.

My mother was a doctor. My abiding recollection of her is that, every night, at the end of the day when her chores were done, she would pick up her medical journals and updates on all medication available to keep herself up to date with the latest evidence and research, in an otherwise very busy day. That was what she anticipated doing each night, and she was bang up to date on treatments and everything to do with her work.

Not only that, but an annual report could be read by people themselves, especially if they want to follow up on one or other point of the medical advice. Professionals can disagree among themselves about how they interpret the evidence—we heard from my noble friend Lord Moylan one example of how gynaecologists can disagree over even a definition. It would be very helpful for people to see such a report for themselves; this is particularly so in the case of sensitive subjects.

For all those reasons, I support requiring an annual report on the complications such as that proposed in the Bill, which is along the lines of the 2023 report by the NHS. I wholeheartedly support my noble friend’s Bill.

Windsor Framework (Retail Movement Scheme: Plant and Animal Health) (Amendment etc.) Regulations 2024

Baroness Lawlor Excerpts

Wednesday 23rd October 2024 Lords Chamber

[Baroness Lawlor (Con)]

My Lords, it is hardly surprising that the Secondary Legislation Scrutiny Committee highlighted this instrument as likely to be of interest to the House on the grounds that it is

“politically or legally important and gives rise to issues of public policy”.

To that, I would add that it is constitutionally important.

I am therefore grateful to the noble Baroness, Lady Hoey, for proposing this Motion to annul the regulations. Under them, the UK Government will impose EU import laws on certain packed agri-goods entering this country from the rest of the world such as basil, cut flowers, fruit, and certain chicken products from Thailand and China. Not only, therefore, is Northern Ireland to be subject to the EU’s economic and trade laws, or even the lighter-touch version we are told is the aim of the Windsor Framework for goods going there from GB, but so too is the whole of the UK to be under certain EU laws.

The Government say that they want to promote the integrity of the UK’s internal market. That is something they also claim to desire in the new Product Regulation and Metrology Bill. I suggest that one way to do that is to extend the UK’s post-Brexit trade freedoms to Northern Ireland and continue the serious negotiations for revising the 2019 agreement, which combined sticks with carrots. However, the Government intend to do so by imposing EU laws on the rest of the UK by statutory instrument and instead of the UK’s own statutory regime. That sounds to me to be mighty like the Chequers agreement, which was rejected the by House of Commons three times, but piecemeal and by the back door of statutory legislation. Can the Minister reassure me that this is not the case?

The Windsor Framework, which was at least put to a parliamentary vote, is, like most episodes in the complicated history of my native country, Ireland, testimony to the way difficult problems become intractable, and complexities become overwhelming as a result of political interests which want not to resolve them but to the exploit difficulty for political gain. We heard about some of those interests tonight. The Windsor Framework was announced by the then Prime Minister, Rishi Sunak. It was said to ameliorate the obstacle-ridden movement of goods from one part of the UK to another —Northern Ireland. There was much fanfare, many photocalls with the EU commissioner, warm words and a hotchpotch of operational changes to another flawed settlement imposed by the EU on this country: the Northern Ireland protocol.

However, the protocol was not supposed to be permanent. In parts, it made it clear that both parties accepted the Belfast/Good Friday agreement and the integrity of the UK’s internal market. Each party was also bound to best endeavours legally to resolve what was acknowledged to be a temporary arrangement and designed—I fear—to meet the EU’s desire to keep Northern Ireland as a fief subject to EU economic law. By retaining under its laws part of the sovereign UK, the EU violated the Good Friday agreement, whereby constitutional change must be by the consent of the people, and the promise in the 2019 settlement to respect and accept the integrity of the internal market. This instrument under the Windsor Framework therefore has a flawed pedigree.

I did not vote for the Windsor Framework. I did not and do not support the imposition of EU laws on one part of the UK in violation of this country’s sovereignty without a policy of such importance being a matter of primary legislation. It should not be smuggled in the back door to undo the gains of Brexit for most of this country in order somehow to right the wrongs under which Northern Ireland continues to suffer.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, I refer to my registered interest as a member of your Lordships’ Secondary Legislation Scrutiny Committee and of the Government’s veterinary medicines working group.

It will come as no surprise to anybody in your Lordships’ House that I support the Windsor Framework, as I supported the Northern Ireland protocol. Therefore, I do not support the Motion before us to annul this statutory instrument.

I believe that the Windsor Framework was the best means of dealing with the challenges presented by Brexit for trade and goods on the island of Ireland. Before Brexit, goods moved freely across the island, helping to sustain and underpin our economies in Ireland north and south. To take the example of the dairy industry, milk is supplied from farmers in Northern Ireland. It is processed in factories in the Republic of Ireland, and it comes back, either as butter, whey or cheese, and is sold in the north—and vice versa. We have to give that due recognition. This dual nature and, I suppose, the fact of the all-Ireland nature of part of our economy were recognised in the Good Friday agreement, through the three-stranded relationship and the establishment of the political institutions: the Assembly, the Executive, the North/South Ministerial Council, with north-south implementation bodies, of which one was InterTradeIreland, and the British-Irish Council.

Prior to and since the vote on the Brexit referendum, my colleagues in the SDLP and I have always insisted that there was a need for a special status for Northern Ireland due to the unique trading and other relationships on the island. That has not diminished and manifests itself in the Windsor Framework, which exists to manage those challenging trading relationships. Therefore, we enjoy dual access to the UK internal market and to the EU customs union.

Where there are imperfections with some areas of trade, as has been demonstrated by some of the Windsor Framework instruments, they need resolution, not annulment, through dialogue and negotiation between the UK and the EU, as is happening with veterinary medicines—that work is ongoing—otherwise our agri-food industry could be undermined.

Having listened to the noble Baroness, Lady Hoey, the mover of this Motion, and the noble Lord, Lord McCrea, I note the desire to challenge every piece of secondary legislation on the Windsor Framework as an attack on the constitutional integrity of the United Kingdom. I think this is a little bit disingenuous, because notwithstanding the Windsor Framework and my own political position, Northern Ireland remains within the UK.

This was the view of those people—many who sit on the opposite Benches as well as my colleagues from other parties in Northern Ireland—who argued for the hardest possible Brexit. I say to them: sometimes you get what you argued for. Put simply, it would have been better for us to remain within the EU. I am pleased that my colleagues on the Front Bench in the new Labour Government are working with the EU—via the Prime Minister and other senior Ministers, such as the Paymaster-General—on a reset of relationships, notwithstanding the realities of the situation. I hope that leads to a resolution of all the outstanding difficulties and to less tension and brinkmanship. Through less tension and through negotiation, you can build your economy and good relationships based on collaboration and co-operation.

Yesterday there was a meeting of the Specialised Committee on the Implementation of the Windsor Framework, covered by a joint statement. The joint chairs welcomed the operation of tariff rate quotas for certain agricultural products, and they discussed the intensive work under way in the areas of agri-food, customs, medicines and trade. They noted the importance of

“continued constructive joint working to support those efforts and monitor progress”.

We should all support the Government and the EU in that important work to achieve the full and faithful implementation of the Windsor Framework, and to ensure that wrinkles and challenges are overcome and resolved for hauliers, businesses and the logistics industry. I believe that serves the best interests of all in our communities in Northern Ireland, ensuring that the best possible outcomes are achieved for our economy, society and communities.

The purpose of this instrument on the retail movement scheme for plants is to expand the list of agri-food goods imported for retail into GB from the rest of the world that can move to Northern Ireland under the Northern Ireland Retail Movement Scheme, an issue referred to by the noble Baroness, Lady Hoey. This is all achieved by making changes to the entry requirements for importing these goods into GB so that they can align with the EU-derived entry requirements for importing such goods into Northern Ireland. As a member of the Secondary Legislation Scrutiny Committee, I note that we recognised—remember that our job is purely process driven—that this piece of legislation was likely to be of political interest. That is probably why we are debating it tonight.

It is important to emphasise that the changes made by this instrument will ease the movement of certain goods from GB to Northern Ireland via the Northern Ireland Retail Movement Scheme. In fact, Defra emphasises that the changes made by the instrument were sought by business. Those who argue vociferously against this and other statutory instruments do so, they say, on the lack of proper consultation on constitutional imperatives. Can the Minister, my noble friend Lady Hayman, advise us of the type and nature of the consultation that has already taken place with businesses?

It is important to emphasise that businesses want to see a resolution to all the challenges presented by Brexit and the bureaucracy. They have said to me that they welcome any agreement when faced with the catastrophic alternative of a no-deal Brexit. That is why businesses have been fully co-operative in all these areas of the Windsor Framework. Business and trade in Northern Ireland welcomed an agreement that provided continued access to the all-Ireland market, which many businesses in Northern Ireland relied on. Furthermore, business welcomes a unique solution for a unique place, with trade, social, family and emotive ties with both Britain and Ireland. But it also wants any resolution of the wrinkles in the bureaucracy.

Product Regulation and Metrology Bill [HL]

Baroness Lawlor Excerpts

2nd reading
Tuesday 8th October 2024 Lords Chamber

[Baroness Lawlor (Con)]

My Lords, I thank the Minister for his analysis. It is a pleasure to congratulate him on his appointment and welcome him to the Government Front Bench. I have greatly enjoyed working with him on other enabling Bills, such as the CPTPP Bill, and find myself in agreement with him on many issues. I also welcome the noble Baroness, Lady Winterton of Doncaster, and congratulate her on her winning maiden speech and her extremely impressive parliamentary career. I look forward to her future contributions to this House.

This Bill can be read in two ways. First, it can be read as an enabling Bill, to enable regulation on product safety and consumer protection to be updated, to keep pace with new products hitting the marketplace and new platforms for the market, especially online retail. The Bill, as we have heard, will update product regulation to keep pace with market developments and new marketplaces, and provide, as we have also heard, a means of recognising new or updated EU product requirements, with the intention of preventing additional costs for business. Noble Lords across the Chamber have commented on this, and we have heard many examples of the scary risks from e-bikes, the safety mechanisms that do not work and the calls on the London Fire Brigade. This is all very illuminating and, where necessary, I would totally support the updating of safety and product regulation.

Secondly, in addition to the first way of reading the Bill, it can be seen, as other noble Lords have pointed out, as a Bill to rationalise the UK’s product regulation across the UK’s internal market and to keep it up to date with EU product regulation, which Northern Ireland has been obliged to accept. The King’s Speech guidance illuminates the second reading of this measure, although I am afraid that the Bill is less than forthright about it. I hope the Minister will forgive me if I have questions about that. Page 38 of the guidance says:

“As most product safety legislation falls within scope of the Windsor Framework, EU changes to product regulation only apply in Northern Ireland, resulting in divergence within the UK internal market as EU laws are updated. This Bill gives the Government specific powers to make changes to GB legislation to manage divergence and take a UK-wide approach, where it is in our interests to do so”.


The House of Lords Library briefing, for which I am most grateful, highlights this provision as follows:

“The Government has stated the Bill would give it specific powers to make changes to … GB … legislation to manage divergence within the UK internal market. … Under the bill’s provisions, the government would be able to amend GB legislation in order to … take a UK-wide approach”,


et cetera.

In the impact assessment for the Bill, section 4 explains that the Government’s preferred option to change the law on product framework will ensure the framework is

“agile in its response to emerging threats, new technologies and changes in EU law … This option will ensure that the Government can fully implement a framework for recognising existing EU requirements for a range of products”

and ensure powers

“to enable the Government to manage divergence pragmatically”.

This suggests that the Government will be empowered, in order to manage divergence, to introduce and impose EU goods and product law as they decide. It implies that the EU goods laws now imposed on Northern Ireland could or will be extended to the whole of the UK. Can the Minister clarify whether this is correct and what precisely the Government intend in order to take a UK-wide approach to the internal market, and under which powers particularly conferred in the Bill?

Are the Government planning to end the dual system either at one stroke or in a piecemeal way? This is a dual system in which we have an EU system for Northern Ireland products and UK arrangements which may diverge from inherited EU regulation. Will that be by imposing EU product laws on the whole UK manufacturing sector in order to promote the integrity of the internal market?

I now turn to specific questions on Clauses 1 and 2. Clause 1(2) gives the Secretary of State powers to make regulations for

“marketing or use of products in the United Kingdom, which corresponds, or is similar, to a provision of relevant EU law for the purpose of reducing or mitigating the environmental impact of”

goods. The Henderson Chambers barristers, Prashant Popat KC and Noel Dilworth, in an analysis published on the web, for which I am grateful, say that Clause 1(2)

“empowers the Secretary of State to harmonise UK law with EU law in order to reduce or mitigate the environmental impact of products”.

Can the Minister confirm that he agrees with this analysis and that the UK Government can now decree that our producers must follow such EU legislation as they—the Government—decide, for the purpose, of course, of reducing or mitigating the environmental impact of products?

If so, can the Minister point me to specific pieces of EU legislation, which, to date, fall in this category—since, of course, 2018—that is, any existing EU regulations, and which UK goods and producers will be affected by and subject to it?

I am sorry for the list of questions, but I hope the Minister will bear with me. Is it supposed to be a dynamic alignment, as other noble Lords have suggested, so allowing the continued keeping up with EU laws on product safety? If so, what is the certainty that producers can have as to whether the rules will change, even when some product is already on the assembly line? Who will judge whether a product falls within the law—in fact, EU law—and who will operate the law?

I now move on to the powers given for product requirements in Clause 2, to require conditions to be met for products in the UK. I refer to Clause 2(7), which allows that

“product regulations may provide that a product requirement is to be treated as met if … a requirement of relevant EU law specified in product regulations is met, or … such a requirement is met and conditions specified in the regulations are also met”,

provided due regard has been taken of

“the social, environmental and economic impact of making the provision”.

Does this mean that, in addition to the assimilated or inherited EU law, the Government intend to allow or impose a replacement of UK product law with EU product regulation, and in practice, the shadowing of the EU’s level playing field laws and EU economic law for goods in a dynamic alignment?

If my reading is correct—I would like some confirmation on this—it suggests that the Government intend, under cover of the Bill, to bring in the Chequers agreement piecemeal by the backdoor, which was rejected by the House of Commons three times. Would the Minister agree with that analysis in general?

To conclude, I urge the Government to embark on their new term of office, for which I wish them very well, by being open and transparent with the people of this country, to rethink the Bill to allow only for standard updating procedure for product regulation and metrology where absolutely necessary, and to drop the enabling powers in the Bill which allow them to impose EU law and regulation alignment by the backdoor.

I conclude by proposing, as other noble Lords on this side have already outlined, that the UK recognises the best international standards, wherever they come from, and that it plays its part in helping to shape these standards for product regulation, as it has done so successfully in so many other areas. I note here international financial services regulation in particular. Indeed, I echo the noble Lord, Lord Lansley, in saying that the UK is well-placed to chart its own course and to reflect the best international standards, without looking over its shoulder to enact EU regulation. Much of it, I fear, is unequal to keeping pace with the best—and the worst—new products as they hit the market and the best international standards.