Employer National Insurance Contributions

Daisy Cooper Excerpts

Wednesday 4th December 2024 Commons Chamber

[Daisy Cooper (St Albans) (LD)]

On 23 October, at Deputy Prime Minister’s questions, I warned the Government that an increase in national insurance contributions would impact not only millions of small businesses but social care providers. That was a week before the Budget. Here we are, six weeks on from that exchange, and we are still talking about the impact of those changes. The reason is that the unintended consequences are huge.

We all know the Government have received a terrible inheritance from the Conservatives. The Conservatives flatlined our economy, blew a hole in the public finances and left public services on their knees. In the wake of the Conservative Government, there is a litany of broken promises. They promised to recruit 6,000 GPs, and they did not. They promised to fix social care for good, and they did not. Every single year since 2015, they failed to meet their 62-day cancer treatment target. I have huge sympathy for the fact that the Labour Government need and want to invest in our NHS and care. However, I am concerned about the indiscriminate impact of the changes to national insurance contributions. [Hon. Members: “Ah!”] You’ve heard this before—come on. Not only will the changes undermine growth, they will undermine the efforts to get the NHS and care back on their feet.

Over the past six weeks, all of us have heard concerns about the impact the changes will have on GPs, dentists, pharmacists and social care providers—all critical organisations to getting the NHS and care services back on their feet. We have heard about the impact on the early years sector. I am concerned the changes will drive up the cost of childcare when we should be driving it down to help parents get back to work.

Over the past few weeks, I have raised examples from my constituency of the impact the changes will have, including on Citizens Advice, which gives advice to some of the most vulnerable people; Hightown Housing Association providing social homes; Quantum Care, a social care provider; Rennie Grove Peace Hospice Care; the Bedfordshire and Hertfordshire local medical committee representing GPs; DJs Play; and Ye Olde Fighting Cocks, the oldest pub in England. We know small businesses are the engine of our economy and backbone of our communities.

[Mr Perkins]

I am glad to hear that Liberal Democrats support the extra money for the health service, special needs education and social care. I apologise for my impatience, because I am sure the hon. Member is just about to get there, but can she tell us where the £25 billion should come from if not from this national insurance rise?

[Daisy Cooper]

I welcome that intervention. In the debate on the National Insurance Contributions (Secondary Class 1 Contributions) Bill yesterday, I addressed that question head on. I will try to remember my notes, which are sitting with Hansard. The hon. Gentleman will be aware that the OBR has said the £26 billion is actually reduced to £10 billion when behavioural changes and rebates to the NHS and care are factored in. On raising that £10 billion, we have said we would reverse the tax cuts that the Conservatives gave to the big banks, raising £4 billion. We could raise a further £3 billion by increasing the remote gaming duty and the digital services bill.

We set out proposals in our manifesto to reform capital gains tax in a different way from the Government. Our measures would have raised about £5 billion, so unlike the Conservatives—who did not set out the impact of the £10 billion to £20 billion of cuts that, based on their manifesto, would have been inevitable—we as a constructive Opposition have set out suggestions. I urge Labour Members to take up our ideas, if not in this Budget then certainly in the next.

We are approaching Small Business Saturday, when I am sure we will all be in our constituencies talking to small business owners. We know that small businesses are the engine of our economy and the backbone of our communities, and in many cases, they make our high streets what they are. When it comes to health and care businesses, though, I am concerned that this measure takes with one hand and gives back with another, but with no guarantee that the money that comes back will cover the costs. As such, I urge the Government to rethink these changes to national insurance contributions, but if they do not, I urge them at the very least to exclude health and care providers from these measures.