National Insurance Contributions (Secondary Class 1 Contributions) Bill

Baroness Sater Excerpts

Report stage
Tuesday 25th February 2025 Lords Chamber

[Baroness Sater (Con)]

My Lords, I shall speak to Amendment 9, to which I have added my name, and to Amendment 4. I declare my interest as set out in the register and as a trustee of the Dartington Hall Trust.

My contribution today will be short, as so much as already been said during the passage of the Bill. We have heard many passionate statements today. I have already spoken of my concern about the impact of the increases in national insurance contributions on the future of the charity sector and its ability to continue to deliver much-needed services and support. Along with many others, I believe that we have put forward compelling and passionate reasons why the charitable sector should not be subject to the Government’s national insurance contribution increases.

At both previous stages of the Bill, I have respectfully asked for the impact assessment of this tax on the sector. The Minister and his Government have not, to date, reconsidered their position or produced the impact assessment, which other noble Lords have again asked for today. It seems extraordinarily unfair that the Government indirectly exempt the public sector but decline to exempt or reimburse the charity sector. I cannot understand it.

At the risk of repetition, let me say that the National Council for Voluntary Organisations estimates that the increased cost of this tax to the sector is £1.4 billion. It has raised its concerns to the Treasury. Together with the Association of Chief Executives of Voluntary Organisations and the Charity Finance Group, they perfectly summed up this situation when they wrote that

“the knock-on impact it will have on individuals, communities and local economies who rely on us will be devastating”.

Those are voices from the sector, who represent so many charities across the country.

I am sure that the Minister has heard many calls for help himself from across the charity sector. I hope that he recognises that this tax will have a long-lasting impact on the sector’s ability to deliver many of the vital services on which government and so many others rely. Let me put to your Lordships this: if a charity approached you for support for a good cause, I have little doubt that you would be generous to the extent that you could afford; if the same charity asked you for a donation not to do good works but so that it could pay the increased taxes to the Government, I suspect that you and I would not feel inclined to put our hand in our pockets. The charity sector should not be a cash cow for the Government.

Sadly, unless the Government reconsider this tax on our charities, they will greatly diminish, and the majority will need, at best, to shrink the number of people they employ and the services they provide. In the worst scenarios, charities will close. We have already heard from charities, including from my noble friend Lady Fraser, of staff reductions, redundancies and potential closures. Fundraising and costs management is difficult enough for charities; the future of the sector is looking very bleak. Many of them help the most vulnerable in society, do wonderful work across many other areas—I will not list them today—and are the backbone of our civil society. I hope that the Minister will reconsider his position and listen to what is said today.

[Baroness Fraser of Craigmaddie (Con)]

My Lords, I rise to thank my colleagues. As the chief executive of a charity, I know that the sector is watching and listening to what we are doing here and urging us on to do everything we can to mitigate this disastrous policy.

The noble Lord, Lord Bruce of Bennachie, mentioned Scotland. In an earlier debate, it became apparent that the drafting of some of the amendments perhaps did not cover Scotland. Any charity in Scotland of any size has to be registered by the Office of the Scottish Charity Regulator and I would want to be reassured that exemptions covered the entire sector. It amounts to 5% of Scotland’s workforce, and with an increasing number of redundancies and the struggle to recruit volunteers, the workforce is already under strain and potentially limited in its capacity to deliver services.

The Minister spoke earlier about the Government’s increased funding to various sectors, some of which are covered by the charity sector. However, he did not outline how that might help those not in receipt of public sector funding but who are delivering services which support public sector delivery.

Finally, as chief executive of Cerebral Palsy Scotland, SEND transport is an issue firmly in my bag. We already know that the SEND system is under immense strain. We already know of children who cannot go to the school it has been assessed they should attend because of transport issues. This is very complex: transport is provided mostly by private providers. There is already a limited choice of schools. Many children need specialist vehicles to get from A to B. As the noble Baroness, Lady Bennett, said, many firms will be forced to hand back contracts.

I look forward with interest to the Minister’s response to these challenges.