National Insurance (Contributions) Bill

David Rutley Excerpts

Tuesday 10th December 2013 Commons Chamber

[David Rutley (Macclesfield) (Con)]

I, too, congratulate the Government on bringing forward this important Bill. It was a pleasure to serve on the Bill Committee. I believe that the measures it contains will make a vital contribution to helping a cause that I believe in passionately: helping more people take on employees for the first time.

We have to get more of the growing band of self-employed people in this country to want to take on an extra employee and we have to overcome the barriers to that. Some 4.2 million people in this country are self-employed, which is 14% of the population, up from 12% at the turn of the century. The good news is that part-time self-employment is down and full-time self-employment is up, which is a good thing, because people are finding that it is a worthwhile form of employment and are making a contribution to the economy. The push factors in driving people to that form of employment are on the way down and the pull factors are clearly on the way up, and more young people want to get involved in self-employment.

However, the real challenge and opportunity that the Bill addresses is that of encouraging more of the self-employed to want to take on their first employee and helping people to see the benefits of working in that environment. Sadly, the pace of improvement in that area is not keeping up with the increase in self-employment. We need to help the self-employed to nudge open the barriers to becoming first-time employers and feel confident to take on employees, whether they are tangible barriers in IT, legal matters or human resources, or perceived, more psychological barriers such as their concerns about dealing with HMRC or about getting rules wrong in employing somebody.

In the Adjournment debate I held on this subject at the beginning of November, I talked through a whole series of options that we could consider to help address this challenge, but the most important thing to do today is to acknowledge that this Bill takes some vitally important steps in doing so. It will be a boost to first-time employees, whether they are apprentices, long-term unemployed, those who are economically inactive, or those who are looking for their second, third, fourth or even fifth careers.

[Ian Swales]

The hon. Gentleman is making a good point. Does he agree that the businesses he is describing find it difficult to find the time to apply for complex reliefs, and does he therefore join me in welcoming the simplicity of these proposals?

--- Later in debate ---

[David Rutley]

The hon. Gentleman makes a vital point. The great thing about this initiative is that it is very simple. The hon. Member for East Antrim (Sammy Wilson) also made the important point that we need to make every effort to communicate that to small businesses. I know that the Minister is working hard in that direction as we move the Bill forward.

We need to help smaller businesses—micro-businesses —in the task of taking on employees because they are often better at taking on the long-term unemployed or those who are difficult to employ. That is another reason to welcome the Bill. I am pleased that the autumn statement went further in scrapping employers’ national insurance for under-21s completely, as in new clause 3. That is a vital step. As many Members on both sides of the House have said, it is one of the ways in which we will be able to tackle youth unemployment more comprehensively in the longer term.

This Bill is not just about improving economic growth but about tackling youth unemployment and social mobility. I congratulate my hon. Friend the Minister on bringing it to the House, helping it to progress so speedily, and doing it all with his characteristic charm, wit and dexterity. I support it because of what it will do for employment in helping more people to take on employees for the first time, and what it will do to tackle youth unemployment and drive forward sustainable economic growth that is grounded in private sector employment rather than in the public sector that was so much a focus of the previous Government and that we need to move on from. As my hon. Friend the Member for Bedford (Richard Fuller) pointed out, the hon. Member for Birmingham, Ladywood (Shabana Mahmood) might want to consider not taking her flip-flops on holiday next summer. This might be a nasty reminder of where the Labour party once stood with its jobs tax. We need to move on from that, and this Bill takes us to a better place. I commend it to the House.