National Insurance Contributions (Secondary Class 1 Contributions) Bill

Baroness McIntosh of Pickering Excerpts

Report stage
Tuesday 25th February 2025 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I take this opportunity to support the sentiments of the noble Baronesses, Lady Barker and Lady Kramer, in tabling these amendments, in particular Amendment 9A. I declare my interest as advising the board of the Dispensing Doctors’ Association. I wonder whether, when the Minister comes to respond to this group, he could clarify the position. I noticed that dispensing doctors are not referred to in Amendment 9A, but in effect they probably employ more staff than other GPs, pharmacies or organisations itemised in the amendment.

The reason for that is that, in addition to dispensing to regular patients, dispensing doctors also perform a profoundly important role in rural areas where there is no community pharmacy, because their patients have nowhere else to go. A dispensing doctor normally intervenes to dispense in those rare circumstances. I have to say that the reason I am so familiar with dispensing doctors is that my late father and my now retired brother were both dispensing doctors.

As dispensing doctors are quite large employers in this regard, is the Minister minded to look favourably on reimbursing them for the additional costs that they will incur through the increase in national insurance contributions, either through the very helpful amendment moved by the noble Baroness, Lady Barker, by adding dispensing doctors to it, or will he look at some other avenue to ensure that the costs incurred by dispensing doctors will be met? I am sure the Minister is aware that pharmacies and dispensing doctors are currently not being fully reimbursed for the costs of medicines that they are dispensing or prescribing, so they are in an acutely difficult position caused by the Government’s announcements on national insurance contributions in the last Budget. I ask him to answer those points in addition to those raised by the noble Baroness, Lady Barker.

[Lord Hope of Craighead (CB)]

My Lords, I support the amendments in this group, which seek to mitigate the effect that the measures in this Bill will have on charities that provide social care. Particular attention needs to be paid to those that provide services in areas where the primary responsibility lies on the public sector. I understand that about one-third of social care staff in Scotland are employed by the voluntary sector. The support that they provide is an essential part of the system of social care in Scotland as a whole, and without their support the public services as currently funded would be quite unable to meet what the public need demands of them.

To put a little colour on what I have just been saying, I will return very briefly to an example I gave to the Grand Committee—that of the Cyrenians, a charity that addresses the causes and consequences of homelessness in the south-east of Scotland. It sees homelessness as something which is always about much more than a lack of housing; it cannot be solved simply by building more houses, nor can it be solved by the public sector alone. What the Cyrenians do is help people to avoid becoming homeless in the first place. It provides a range of services, such as mediation and support to families that are at risk of breakdown—which leads in due course to homelessness of one partner or the other.

The Cyrenians charity also provides services to ensure that people coming out of hospital are not discharged into homelessness. It runs a residential community which provides accommodation for people with acute psychiatric and mental health problems who have been discharged from a hospital where they have been receiving treatment. These are people who can be discharged only because that support is available.

All in all, the Cyrenians run over 60 services with a staff of over 200. It estimates that the increase to national insurance contributions provided for in the Bill will cost it about £170,000 a year. This is a significant burden on its finances which, for various reasons, are already being stretched very thin. I am told that it cannot benefit from any increase in the employment allowance. The Minister will correct me if I am wrong, but the charity believes that it is not eligible, as its class 1 national insurance liabilities were more than £100,000 in the last year. The public sector exemption is not available either.

The result is that the charity will no longer be able to provide the training and development that its staff need. That will lead, inevitably, to an erosion in the extent and quality of the service that it offers. Those who will suffer will be those most in need of protection: those who are at risk of, or who are already suffering from, homelessness, for whom the public services cannot provide.

Another Scottish charity that works in the area of social care is Ark Housing Association. It is a larger organisation which is in a similar position to that of the Cyrenians in that it seeks to provide services across a large area of Scotland. In its case, these services are offered to vulnerable adults, such as those with a learning disability and other complex needs. As matters stand, that charity too is not eligible for any support from the Government, as it has a turnover of about £24 million per year and employs over 700 people. It estimates that the effect of the Bill on its operations will be, in its own words, “devastating”.

As matters stand, the charges that it faces to do its work barely break even, year after year. It estimates that its national insurance increases will amount to a further £600,000 per year. This means that it will not be able to survive without damaging cuts to its services to reduce costs, and even these may not be enough for it to survive. As in the case of the Cyrenians, the people most affected are the thousands of vulnerable people for whom the social care that Ark provides is a vital lifeline, and who have nowhere else to go.

It is not an exaggeration to say that, as the Bill stands, social care and support providers in the third sector in Scotland will face a situation of crisis that the public services simply cannot cope with. Something has to give, and the responsibility for this lies with the Government. I hope that the Minister will feel able to assure the House that he recognises that something needs to be done to minimise the impact of these increases on this sector. For the time being, however, I will support the noble Baroness, Lady Barker, if she decides to press her amendment.