Employer National Insurance Contributions: Police Forces

Debate between Diana Johnson and Wendy Morton

Tuesday 11th February 2025 Westminster Hall

[Dame Diana Johnson]

As I have just said, the PCC I spoke to last week did not raise any concerns about the financial settlement. Obviously, the PCC and the chief constable use that money in the way that they decide for Cheshire. I have certainly had conversations with the chief constable of Cheshire, and the right hon. Lady is right that I have received a letter from the chief constable that was copied to a number of Members of Parliament in Cheshire.

I accept and recognise that the changes to national insurance contributions will have an impact on public sector budgets, including policing. Although the decision to increase national insurance was made to ensure the sustainability of essential public services, I recognise that the changes create additional cost pressures for police forces. It is useful to note that in 2003, and in 2011 under the coalition Government, there was an increase in employer national insurance to fund the national health service and wider national priorities. So this is not unusual; Governments of both complexions have taken forward changes to national insurance.

It is also worth noting that the changes introduced in the Budget last year broadly return national insurance contributions revenue as a proportion of GDP to the level that they were before the previous Government’s cuts to employee and self-employed national insurance contributions. That sets the context, and this has been done in a way that does not result in higher taxes in people’s payslips.

[Wendy Morton]

When the right hon. Lady says that this change will not impact on employee’s payslips, she completely misses the point: whether in a business or the public sector, we cannot just keep squeezing and squeezing and expect things to continue as they are. If it is a business, we squeeze them out of business—there are no jobs; there will be no pay packet. If we keep squeezing the public sector, there will be no public services.

[Dame Diana Johnson]

With the greatest of respect to the right hon. Lady, who I think was Chief Whip under the disastrous premiership of Liz Truss, I am not really prepared to take lessons on economic stability and how to run the economy from a Government that trashed the economy and that caused such devastation to many families through the rise in interest rates and mortgages. I think perhaps a little humility might be in order.

We have set aside funding to protect the spending power of the public sector, including the NHS, from the direct impacts of the increase in employer national insurance. That is why we are providing compensation of £230.3 million to support forces with the cost of changes to national insurance and to ensure that no force is left out of pocket as a result. The right hon. Member for Tatton may like to know that that is similar to the funding provided by the previous Government in the 2024-25 police funding settlement to cover the additional costs of pension changes. Again, this is not unusual.

The right hon. Lady may have concerns about the £3.7 million pressure reported by her local police force as a result of the changes and the impact that that could have on officer numbers. As set out in the settlement papers, however, we are fully covering those costs. Actually, Cheshire is getting £3.9 million in national insurance compensation for next year—more than the anticipated need. That is alongside the £200 million that we are investing in neighbourhood policing to ensure not only that officer numbers are maintained, but that visible policing in our communities increases. Our mission is clear, and the funding provided in this settlement will ensure that forces across the country are equipped to meet the challenges that they face and to protect our communities.

As I have said a number of times this afternoon, I of course recognise that any additional pressures on forces are concerning. That is why we will continue to engage closely with forces and finance leads to ensure policing has the resources it needs.

I thank the right hon. Member again for securing this debate, and thank all those who have spoken. We are compensating for the national insurance increases to ensure that forces have the resources they need to protect visible neighbourhood policing. Our position could not be clearer. We will work in lockstep with the law enforcement system in our shared effort to keep people safe, whether that involves restoring and protecting the long-standing tradition of British policing, such as neighbourhood policing, or acting to combat the most dangerous emerging threats. This Government are wholly committed to providing the police with the powers, resources and tools that they need to protect the public.