Employer National Insurance Contributions

Gideon Amos Excerpts

Wednesday 4th December 2024 Commons Chamber

[Lisa Smart (Hazel Grove) (LD)]

I will talk in particular about two organisations in my constituency that have contacted me about the subject we are debating. For context, we know that small businesses have had a tough time for a number of years. They have been struggling with rising prices, interest rates and input costs going up. They were absolutely hammered by the previous Conservative Government, who broke their promise to reform business rates, trapped them under a mountain of red tape and made it much harder and more expensive to trade internationally. Making things harder for small businesses and their workers just is not right. They are the lifeblood of our economy and are exactly where we should be looking for the growth we all need. When we are talking about small businesses, we are also talking about community pharmacies, hospices and GP practices, all of which will be impacted by this tax rise.

We on the Liberal Democrat Benches are particularly worried, as the House would imagine, about the impact of these tax rises on our health and social care sector. We are worried about what it means for social care providers, for the families who depend on them and for the local councils that have to find the funding for many of them. Raising the employment allowance will shield only the very smallest, leaving thousands of small organisations still negatively affected.

In the Chief Secretary’s opening remarks, he asked for ideas about where else he might find some tax revenue. I really encourage him, and indeed all Government Members, to reread the 2024 Lib Dem manifesto—I am sure they have read it at least once. As my hon. Friend the Member for St Albans (Daisy Cooper) laid out from our Front Bench, the Government could reverse the tax cuts that the previous Government gave to the big banks, reform capital gains tax so that it is applied in a much fairer way, and charge the gambling giants more so that they pay their fair share.

I turn to the two organisations in my constituency. A childcare company got in touch because, like many early years settings, it allocates 70% of its revenue to staff wages, and annual increases to the national living wage combined with the increase in NICs will make it impossible to pay for rent, staff improvement and training. That will just make the staffing crisis worse, which is the exact opposite of what the Government say they want.

[Gideon Amos (Taunton and Wellington) (LD)]

Does my hon. Friend agree that businesses such as Sheppy’s cider farm in my constituency, to which I invite all Members to come to enjoy a pint of cider, will be affected not just by the national insurance rises but by the change in business rates and the family farm tax?

[Lisa Smart]

I thank my hon. Friend for his intervention. Sadly, I have not yet tried the wares of Sheppy’s cider farm, but I would welcome the opportunity to visit, try those wares and support it as we all need to do in the face of these changes, which affect everyone.

The second organisation is one of my GP practices, which emailed me. It operates as a legal partnership, as it has done since the inception of the NHS, but as it is a GP practice it lacks flexibility to absorb the increased costs. It cannot raise prices and it cannot do more than it is already doing and drive up activity levels. As it is designated as a public authority but does not get an employment allowance exemption, it will bear the full cost of the impact. It tells me that the rise in national insurance and the lowering of the thresholds will force it into reductions in clinical staffing, adversely impact patient care and increase waiting times. That is exactly the opposite of what the Government say they want.

Oral Answers to Questions

Gideon Amos Excerpts

Tuesday 3rd December 2024 Commons Chamber

[James Murray]

As the right hon. Gentleman will see in the National Insurance Contributions (Secondary Class 1 Contributions) Bill that we will be debating this afternoon, we have doubled the employment allowance to help small businesses to employ up to four people earning the national living wage without paying a penny in national insurance. That is dedicated support to help those small businesses, in the context of what, I admit, is a tough decision. If the right hon. Gentleman has a chance to contribute to the debate, he might say whether he supports the extra public services funding that comes from those difficult decisions.

[Gideon Amos (Taunton and Wellington) (LD)]

Businesses like Mr Miles in Taunton High Street are being hit hard by the changes in taxes for hospitality businesses, including the increase in the wage bill and national insurance contributions, and the massive increase in business rates. That business is now considering reducing its opening hours, which would make our high street less vibrant than it should be. One challenge is the £50,000 rateable value limit for the discount, as many high street premises have a rateable value of more than £50,000. Will the Chancellor consider reviewing the limit placed on the business rates discount for small businesses?

[James Murray]

As the hon. Gentleman will know, we set out our plans for reforming business rates to ensure that retail, hospitality and leisure properties on the high street with rateable values below £500,000 will benefit from a permanent tax cut from this Government. The importance of that tax cut being permanent is that it gives businesses the stability they need to invest and grow. I look forward to his support for our reforms when we vote on them in due course.

Non-Domestic Rating (Multipliers and Private Schools) Bill

Gideon Amos Excerpts

2nd reading
Monday 25th November 2024 Commons Chamber

[Gideon Amos (Taunton and Wellington) (LD)]

The hon. Member for Thirsk and Malton (Kevin Hollinrake), who spoke for the official Opposition—he is no longer in his place—described the Conservative Government’s approach to supporting business. I was going to say that I listened to him with interest, but I think incredulity would be a better word. My hon. Friend the Member for Witney (Charlie Maynard), who is no longer in his place, was rather harsh on the Conservatives. He said that they never followed up on their commitments on business and did not have a clear policy on business. The Conservatives had a very clear and pithily described policy on business: it began with f, had k in the middle and ended with the word “business”. And believe me, they delivered on that policy with their post-Brexit trade deal. In case the message had not been rammed home hard enough, they confirmed it with a Budget that played helter-skelter chaos with the economy.

I therefore sympathise with the new Government’s approach in terms of the Budget they are trying to set and in terms of establishing stability. That is something I would want to support, but I am disappointed that I will not be able to vote for the Bill because of the effect it will have on towns like Wellington and Taunton, which will be hit by a triple whammy. Those towns support some great independent schools, which are charities: Taunton school, Wellington school, King’s College and Queen’s College. They sustain around 1,000 jobs in the constituency, many of which are now under threat. Many workers at those schools—cleaners and catering staff—are worried about what is going to happen.

There are then the very serious effects of the rise in national insurance contributions on small businesses, particularly the many small businesses whose rateable value is over £51,000. That is quite typical for SMEs in a high street in this country—at the smaller end, I would suggest. The owner of Mr Miles Tea Room, a superb place to go in my constituency, has written to tell me about the combined effects of the Budget on his business:

“Firstly, all my staff will now see a reduction in the hours they will be scheduled. As a result, no doubt, some will leave. Where many of my employees already earn over the current minimum wage, I will not be able to increase their pay rates by as much as I have done in the past. Secondly, any full-time employees who leave our employment will only be replaced by potentially 2 or 3 part-time employees. Thirdly, I will not be investing in any capital equipment in my kitchen or new decor in my restaurant. Fourthly, there is a serious potential for me to operate on shortened trading hours, thus reducing the vibrancy of the Town Centre.”

He goes on:

“I was cautiously optimistic that a new Labour Government couldn’t possibly be worse than the previous Tory one in terms of lack of support for SMEs. Sadly, in the space of 3 short months this Government has already proved my optimism was misplaced and there will be many casualties over the next 12 months as the new measures take effect.”

I urge the Minister to reconsider both the effect on independent schools, and I am a great supporter of the state school system—

[Helen Maguire (Epsom and Ewell) (LD)]

There is an independent school in my constituency, Kingswood House school, which has around 50% of its pupils with special educational needs. Many of those pupils do not have an education, health and care plan. Does my hon. Friend agree that schools providing support to so many SEN children should retain their charitable rate relief?

[Gideon Amos]

I absolutely do agree with my hon. Friend. I am also concerned about the influx of children going to local authorities to apply for EHCPs because they will now need them to get the discount, and about the massive effect that will have on already overstretched local authorities. I worry about how they are going to cope with those applications, over and above the SEN crisis at the moment.

I am a great supporter of state schools, partly because of the record of the Liberal Democrats, who not only ringfenced the education budget in the first years of the coalition, but injected £1.25 billion by inventing the pupil premium, which now injects £3 billion—[Interruption.] The hon. Member for Sherwood Forest (Michelle Welsh) shakes her head, but these are the facts.

[Michelle Welsh]

The pupil premium funding was actually disadvantage subsidy pathfinder funding, introduced by the previous Labour Government. The hon. Gentleman’s party just changed the name.

[Gideon Amos]

The pupil premium was new money, and it went into the state school sector. It was £1.25 billion in the first year, and it is worth £3 billion now. It was in the Liberal Democrat manifesto and was delivered as part of our priority for state schools—but I do not believe in state schools just because of party policy. All four of my children attended great state schools in my constituency: Parkfield Primary School, Bishop Fox’s School, and the fantastic Richard Huish College. The idea that the only way to improve state schools is to level down independent schools shows a shocking lack of imagination and a very disappointing approach to education, and education should not be taxed.

The Minister said earlier that those of us who were going for a different approach should be willing to make clear where we would raise the money, and he was right to make that point. The Liberal Democrats have made the same point, and they have made tough decisions in the past. In our manifesto was a very clear Budget spending plan to restore the tax on the big banks’ profits. It was slashed and then taken away in 2018, but simply restoring that single tax would raise £4.2 billion for the economy. I urge the Minister to adopt the principle that if the broadest shoulders should bear the biggest burden, that should apply in the business sector as much as anywhere else. The big companies, the big banks, the giant online retailers, should be bearing the burden of this Budget, not the small high street firms like Mr Miles in Taunton High Street and the other businesses we have heard about, so I urge the Minister to think further about this.

VAT: Independent Schools

Gideon Amos Excerpts

Tuesday 8th October 2024 Commons Chamber

[Mr Gideon Amos (Taunton and Wellington) (LD)]

Does my hon. Friend recognise that thousands of children do not have EHCPs? My hon. Friend the Member for Chichester (Jess Brown-Fuller) referred to the deluge that would surely come to local authorities in the form of applications for EHCPs. That will be just when, because of the legacy of the Conservative Government, local authorities are on their knees and cannot cope with the level of demand. That will further disadvantage the already most disadvantaged children.

[Munira Wilson]

I think many of us—certainly on this side of the House—would recognise the point my hon. Friend makes, and many have already made it. I suspect that quite a few people on the Government Benches would also recognise that this policy will be a real challenge, because Members from all parts of this House have been turning out in vast numbers at any debate on special educational needs to discuss the major crisis in our state school provision for SEND pupils. The system is broken, and it will have further pressures still.

I come back to the point I was making on partnership working. The sort of exemplary work I was talking about benefits children in the state and independent sectors, and we want to see it become the norm in every part of the country. I fear that it will be one of the first things to suffer when schools are forced to make cutbacks under the Government’s policy. Let us remember that most independent schools are no Eton or Winchester; 40% of them have fewer than 100 pupils. Those small schools, often in rural places, will struggle to absorb this extra cost.

Independent Schools: VAT and Business Rates Exemptions

Gideon Amos Excerpts

Tuesday 8th October 2024 Westminster Hall

[Caroline Voaden]

I absolutely agree with my hon. Friend that those children are going to be most affected by this policy. For those families, the tax change is a regressive step that will force them into an impossible situation and have a devastating impact on children who have already had a difficult start in life—many of whom have experience of the care system, our failing mental health system and a state school system completely unable to cope with all their additional or complex needs. Yes, the state school system desperately needs investment—we know that. We know that the provision for SEND is in a disastrous state, nowhere more so than in Devon, and the chronic underfunding of councils by the previous Government has decimated SEND provision.

[Mr Gideon Amos (Taunton and Wellington) (LD)]

I congratulate the hon. Member for Bromsgrove (Bradley Thomas) on securing this important debate. In my constituency, Taunton school, Wellington school, King’s college and Queen’s college make a massive contribution to the local economy. Beyond that, they also cater for many children with special educational needs and disabilities.

Does my hon. Friend agree that the Minister should consider resources for local authorities to cope with the wave of applications for support from SEND children currently being supported in independent schools? They are not applying for EHCPs now but will doubtless need to in future, if they are no longer able to get the care and support they need at their schools. Does she also agree that the Minister should secure a rise in the armed forces allowance to cope with the 20% increase?

[Caroline Voaden]

It is interesting that nobody is here from the Department for Education to defend the policy and that we have heard nothing about the contribution it will make to increasing SEND provision in state schools. I certainly know that the state schools in my area cannot cope with any additional need, and we have heard nothing about that. Dare I say that the Liberal Democrats had several suggestions for tax-raising options in our election manifesto that do not seem to have been considered yet by this Government? I humbly suggest that a tax on social media companies might be a good place to start, given the impact that they have on the mental health of our young people.

I implore the Minister to rethink how the VAT policy will damage families who have tried so hard to find the right setting so that their children can thrive. If he would like to come to South Devon and see for himself what some of these brilliant schools offer, I will be delighted to show him around.

--- Later in debate ---

[Ben Coleman]

The one thing I did not hear from the hon. Gentleman was an apology for what his party did to the special educational needs system in this country over 14 years.

We do have a problem as a result of the policy, however. Parents who cannot easily afford to send their children to private schools are digging deep into their pockets, as my constituents in Chelsea and Fulham have written to me. That is the situation we are faced with. Local councils are sending kids to private schools because they cannot do otherwise, and the schools are small and cannot easily absorb the VAT. I am pleased that the Government recognise the particular challenges facing children with additional needs and have agreed to exempt those with EHCPs from VAT. I am pleased that the Government have committed, as the Minister said when discussing SEND in a debate before the recess—

[Mr Amos]

I appreciate the point the hon. Member is trying to make, but given that children simply cannot get an EHCP, how does he expect them to get the support they need?

[Ben Coleman]

I am glad the hon. Member appreciates the point I am trying to make. I will make the point it absolutely clear: because children cannot get an EHCP thanks to the failures of the Conservative Government, local councils and parents who can ill afford it are having to send their kids to private schools. I am concerned that the use of EHCPs as a criterion for VAT exemption is too limited, but I do not think that any Conservative Member here has a right to talk about SEND without first saying, “I am sorry.” I support the suggestion of my hon. Friend the Member for Ealing North (James Murray) that before we go ahead with this policy, we undertake a proper assessment of the impact on the education of children with special educational needs who do not have EHCPs. That is a perfectly reasonable point to make, given the hideous, cruel and inept situation in which the Conservative party has left this country’s special educational needs system.

Winter Fuel Payment

Gideon Amos Excerpts

Tuesday 10th September 2024 Commons Chamber

[Sir Roger Gale]

Thank you, Madam Deputy Speaker—I stand chastised. The Leader of the Opposition was in the Chamber earlier this afternoon, but I saw no sign whatsoever of the Prime Minister. However, the answer to the hon. Lady remains the same: the responsibility for this policy lies directly with the Chancellor of the Exchequer and the Prime Minister, and they are going to live to regret it.

[Mr Gideon Amos (Taunton and Wellington) (LD)]

The right hon. Gentleman has expressed the principle that means-testing could be accommodated. Does he agree that many of those who have written to us as Members of Parliament also sympathise with the principle that means-testing could and should come in at some point in the future? The manner in which this proposal is being brought in, before the 880,000 pensioners who are eligible for pension credit are registered for it, is the problem that particularly affects the 21,000 pensioners in Taunton and Wellington.

[Sir Roger Gale]

I am grateful to the hon. Gentleman for his intervention. I have made the point, and will make it again, that I have no quarrel with the principle. I have a huge quarrel with the manner in which this policy is being implemented, because it is cruel and heartless. It is going to leave thousands, if not millions, of pensioners literally out—or more probably in—in the cold this winter, and some of them will die as a result. It is not necessary, it does not have to be done, and it will not save money, so there has to be a rethink.

Just to conclude, I detect a degree of arrogance on the Government Benches this afternoon. The fact that there are only about 30 Members on those Benches speaks volumes to those outside who thought that Members were going to come and hear this matter being seriously debated. There seems to be a belief that the next election is five years away. The next general election may be five years away, but the next election is next May, and those voting in the county council elections in May—those pensioners and their families—will not forget this.

Public Spending: Inheritance

Gideon Amos Excerpts

Monday 29th July 2024 Commons Chamber

[Rachel Reeves]

My hon. Friend speaks powerfully on behalf of his constituents in York Outer. They voted for change because they were sick and tired of unfunded commitments, broken public services and the deterioration in living standards after 14 years of Conservative Government. Today, they found the legacy the previous Government left is even worse than we could have anticipated, with a £22 billion black hole in the public finances.

[Mr Gideon Amos (Taunton and Wellington) (LD)]

I congratulate you on your post, Madam Deputy Speaker, and the right hon. Lady on her position as Chancellor. Does the Chancellor share the anger of the people of Taunton and Wellington in finding that not only is the whole new hospital promised by the Conservatives not funded, but that apparently, as we now discover, even the maternity unit might not be funded. On the restoring your railways programme, will the cancellation of projects also apply to those, such as Wellington station, which have already begun funding and have had GRIP—governance for railway investment projects—stage 4 approval?

[Rachel Reeves]

I can fully understand why the hon. Gentleman’s constituents are so angry with the previous Government for leaving this mess and making unfunded commitments. I assure him that projects that have already started, such as the station he mentions, will go ahead.