National Insurance Contributions (Secondary Class 1 Contributions) Bill

Baroness Stedman-Scott Excerpts

Report stage
Tuesday 25th February 2025 Lords Chamber

[Viscount Chandos (Lab)]

I shall speak briefly to support the arguments and analysis of my noble friend Lord Eatwell and to remind your Lordships of the comments at Second Reading of the noble Lord, Lord Macpherson, who said that if we aggregate the reductions in employee national insurance that were introduced in the last year of the last Government with the effects of this Bill, the effect is about net unchanged. As my noble friend Lord Eatwell has said, all the various causes and organisations that will be proposed as excepted have benefited as employers, in effect, from the employee national insurance cut. Therefore, if they have to moderate their future wage rises, the net income over that period of 12 or 18 months will essentially be the same. That seems to me another argument for treating all the 38 amendments to which my noble friend referred as a heartfelt cry for help that has already been given.

[Baroness Stedman-Scott (Con)]

My Lords, I have not spoken on the Bill so far, but I want to speak now on behalf of charities. Charities are not for profit and they are not for loss. The impact of the Bill’s proposals provides a fiscal challenge, whichever way we look at it. I understand that the increase proposed will impose on charities about £1.4 billion in additional annual costs, and 87% of charities are worried about absorbing these and other costs that are forthcoming. Charities are emotionally driven and business-led organisations; they give their heart and soul to the people they get up in the morning to serve, and we must make sure that the people who need their services are not impacted detrimentally in any way.

While people in the finance departments of organisations, not least the Government, are focused clinically on money, and I understand that, I ask that they look at the impact that the Bill will have on individuals. My dad used to say to me, “Debbie, measure twice and cut once”, and I would like that saying to be applied to decisions in the Bill.

[Lord Hogan-Howe (CB)]

My Lords, I support the Government in opposing all these amendments. Some individually are attractive, especially the later amendment about the level at which national insurance is set. However, I shall not support any of the amendments because I think it is for the Commons and the Government to decide on taxation. It is an unfortunate event that has already been remarked on, and there is an opportunity here to comment and vote on it. I realise the political attraction of forcing the Government to remove these amendments one by one when the Bill returns to the Commons. Some are very attractive—I get that, intuitively —but it seems unfair to unpick a Budget, which is a comprehensive account of the macroeconomics of the country, and then pick off each of these measures by an amendment. I cannot support that; it is good to have the debate, and the Government may decide to change their opinion on any one of them.

The noble Lord, Lord Eatwell, made the point that taxation should be simple, and I agree. If every one of these cases were to be included by the Government in their new Budget, I think that it would be incomprehensible for the public in general. Although I see that, individually, some cases are attractive, I cannot support the amendments for the reasons that I have set out.