National Insurance Contributions Bill

Baroness Primarolo Excerpts

Tuesday 23rd November 2010 Commons Chamber

Second Reading

[Madam Deputy Speaker (Dawn Primarolo)]

Before I call the Minister, I inform the House that Mr Speaker has not selected the reasoned amendment tabled in the name of the Opposition.

--- Later in debate ---

[Mr Hanson]

I look forward to the hon. Gentleman going back to Dover to explain why he is supporting not only a Bill that does not give a national insurance holiday to his constituents, but the VAT rise elsewhere in the Budget proposals—we need to look at that in the round—which will impact on pensioners, the low paid and everybody in his community. This is not a topic for today, but the debate on the national insurance rise was open and honest on our side. During and after the election, the Conservative party argued against the rise, but it is now implementing it. On top of that, it is not meeting the objectives in its manifesto and has increased VAT. I think that a VAT rise is a regressive tax policy that will hit the poorest hardest, but that is the choice that the Conservative party has made.

I want to focus most of my remarks on the second part of the Bill. The decision to introduce a regional employer national insurance holiday is welcome, but it specifically excludes new businesses in Greater London, the south-east and the eastern region. We tabled a reasoned amendment that has not been selected, but which would have declined to give a Second Reading to the Bill because of those exclusions. I sense that the hon. Members for Portsmouth North (Penny Mordaunt), for Meon Valley (George Hollingbery) and for Basildon and Billericay (Mr Baron), who spoke earlier, will have expressed their concerns about how the choices on the national insurance holiday were made. [Interruption.] The Economic Secretary to the Treasury says that we would have increased national insurance contributions across the board.

[Madam Deputy Speaker]

Order. We cannot have comments shouted across the Floor from a sedentary position. It makes it very difficult for Hansard to record our proceedings, particularly when the comments are then referred to without having been recorded. Will the hon. Lady make her point from the Dispatch Box, so that the right hon. Gentleman can answer it?

[The Economic Secretary to the Treasury (Justine Greening)]

My point was that the Labour party would have increased NICs for absolutely everybody.

--- Later in debate ---

[Richard Harrington (Watford) (Con)]

The point needs to be made that the Minister has explained that a significant extra cost would be involved in making this a national programme. As the Member of Parliament for Watford, an area that faces significant unemployment problems, I would say that it would be very nice to have this programme, but the Minister has explained that the cost involved would be more £660 million. I am pleased to see this principle being used, because I believe that selective regional policy can be used in the future. I hope that the Government’s localisation agenda will mean that holidays and similar tax benefits for rates will be extended to specific areas. But for the moment, because of the mess that the Labour Government left us with—

[Madam Deputy Speaker]

Order. The hon. Gentleman will resume his seat. Interventions are supposed to be brief.

[Mike Gapes]

I suggest that the hon. Gentleman should perhaps make his own speech, rather than intervene on mine.

The FSB makes clear its concern about not only the regional variation, but the fact that the proposals do not deal with existing firms. My right hon. Friend the Member for Delyn (Mr Hanson) also made that point from the Front Bench. The FSB says that

“surveys have found that 57% of small businesses without employees would like to employ in the future, which could create…800,000 new jobs”.

It also points out that many small businesses do not survive for more than two or three years, so by discriminating against existing small businesses that have just been established the proposals are another difficulty for that sector. The FSB claims that, on average, its 213,000 members each employ seven members of staff and that most employ five or fewer. It points out that if they were able to get the support that is being made available only to certain businesses in certain regions, there would be the potential for much greater assistance. Therefore, the essence of the proposals is that if the Government are going down this route, they are doing so in a way that discriminates against certain regions and certain communities in the country, and that discriminates between different businesses.

The essence of the proposal, we are told, is that we are all in this together but, sadly, it is yet another example of where we are not. We are all in it together, but we are not all getting the assistance to deal with the problems that the Government will create when they slash the public sector.