Employer National Insurance Contributions: Charities

Daisy Cooper Excerpts

Tuesday 7th January 2025 Westminster Hall

[Daisy Cooper (St Albans) (LD)]

It is a pleasure to serve under your chairship, Ms Vaz. I congratulate the hon. Member for Isle of Wight East (Joe Robertson) on securing this important debate. I believe I have up to five minutes to make some remarks, which feels positively luxurious in the context of the canter we have just had. I will kick back as I think about what to say.

I have been struck by the examples colleagues have given. We have heard a number of charities named from different constituencies: Age UK branches, charities that support survivors of domestic violence, those supporting women and children, ambulances, Mencap, Mind, physical rehabilitation and various volunteer and advice centres. But the one type of charity that has been mentioned more than any other has been hospices. Almost every hon. Member who spoke or made an intervention referred to a hospice in their area. That should surely send a strong message to the Government about the amount of cross-party support in this House for the hospice sector, and why we want to see more from the Government in that regard.

As the MP for St Albans, I have heard, as others have, about charities in my area. One hospice, Rennie Grove, says that the changes will potentially increase costs by around £250,000. A doctor working in palliative care in another hospice that serves my constituents says that the decision not to exempt hospices is “nothing short of devastating.” A trustee from a local mental health charity says that the cuts that need to be made may result in an increase in demand for NHS services. National Age UK has also said that this will put an intolerable strain on its organisation.

We know the Government have a terrible inheritance from the previous Government, but different choices could have been made. The Government say that the national insurance hike will result in additional tax revenue of around £25 billion per year, but the Office for Budget Responsibility clearly states that, after allowing for behaviour changes in response to the tax, such as reducing pay, and once public sector employers are compensated, it will only raise revenue closer to £10 billion.

Instead of raising national insurance contributions on small businesses, health and care providers and charities, the Government could have raised that same amount of money through much fairer tax changes. For example, the Liberal Democrats have proposed reversing the Conservative cuts handed to the big banks; increasing the digital services tax to 6%; doubling the rate of remote gaming duty paid by online gambling companies; and introducing a fairer reform of capital gains tax, so that the 0.1% of ultra-wealthy individuals would pay their fair share, while keeping things the same or cutting tax for other capital gains tax payers. Those other choices could have been made.

Like other hon. Members in this debate, I urge the Government to think again about what they can do to restrict the impact on our charity sector. The national insurance contribution rise is unnecessary when alternative tax-raising avenues are available, as I have just set out. It is self-defeating, because in many cases it will put more pressure on the NHS, and it is fundamentally unfair. It will hit charities that are supporting some of the most vulnerable in our society. Those charities are the glue that hold our societies together and, unfortunately, we are going to see their services slashed.

[Valerie Vaz (in the Chair)]

Order. We are expecting a vote but I will call the Opposition spokesperson, Saqib Bhatti.