National Insurance Contributions (Secondary Class 1 Contributions) Bill

Graham Stuart Excerpts

Tuesday 17th December 2024 Commons Chamber

[Joe Morris]

I thank the hon. Gentleman for his guidance on the correct form of words to use. The reason that I used the term “ultimately” is that it is the fundamental goal of Government to improve the lives of our constituents. That is why I choose to use the form of words that I am using, and why I am focused on the eventual outcome for my constituents. As I said, we did not want to inherit the country in the circumstances that we did. That is fault of the Conservative party, its record and the inheritance it left. We need to bear in mind the context, because that shapes everything and how we go about this.

[Graham Stuart (Beverley and Holderness) (Con)]

Further to the question from my hon. Friend the Member for Hinckley and Bosworth (Dr Evans), we hear the hon. Gentleman’s critique of the previous Government, but we are trying to understand how imposing these costs on GPs at one end of the service and hospices at the other will remotely help the NHS and, more importantly, the people who rely on it. We would like him to explain that, not just slag us off, however much he might enjoy doing so.

[Joe Morris]

I have never turned down an opportunity to slag off the Opposition. I am always happy to do so.

The ultimate reason that the Budget was necessary was to raise the extra money to invest into the NHS. The extra infrastructure investment will support our rural communities, our rural GPs and our care homes. That is the fundamental point of the Budget. It is a reset moment to properly support our public sector once more, which the Conservative party failed to do, as the right hon. Gentleman well knows. We need to restore faith in our NHS and our small businesses that were so badly let down. I have spoken to many across my constituency who share my optimism about this Government and who are convinced of the need for that investment. [Interruption.] Opposition Members can chunter all they like, but it is true. Ultimately, those businesses know that we need to invest in the state in order to drive up standards and confidence and provide the stability that the country so desperately needs.

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[Gareth Davies]

My right hon. Friend—a Lincolnshire colleague and Father of the House—puts it perfectly. Labour says that it supports public services and that those services are apparently being trashed, so why on earth would the Government then go and tax them? Why add to their cost base, which they have very clearly said will reduce services across every constituency? Labour Members will all walk through the Lobby tonight and add to the cost burden of those services. It does not make sense. Charities have also signalled the alarm, with more than 7,000 writing to the Chancellor to warn of the £1.4 billion hit that they will face next year.

[Graham Stuart]

Does my hon. Friend agree that Labour Back Benchers need to speak to their Ministers? As my hon. Friend the Member for Hinckley and Bosworth (Dr Evans) suggested, the Government cannot have meant to do this deliberately. They could accept our amendments today or move some of the funds for the NHS—the £22 billion or £25 billion, whatever it is—across to this, because the NHS depends on social care and other services. At the moment, the Government risk turning something that could be a triumph for them into a disaster, both for the NHS and, more importantly, for patients and those most in need.

[Gareth Davies]

Once again, my right hon. Friend makes a valid point. As I have said already, I am not sure that this was intended. I do not think the Government understand what these measures will do to our communities, to the sectors I have outlined and to the businesses that I will speak about in a minute. The Minister will have to address my right hon. Friend’s point. What will the Government do to mitigate the damage of the Bill on the communities and organisations that I have highlighted?

A sector I have not yet highlighted is childcare, without which millions of parents across the country could not go to work—including, by the way, many in this House. The Bill will contribute an average of £47,000 in additional costs per nursery next year, according to the National Day Nurseries Association. The previous Government did so much to extend childcare to more families, boosting workforce participation and economic growth, but this tax hike will pull us back from that progress. That is not what people voted for. There is no mandate for this harm. I urge the Government to think again.

Ideally, all employers would be made exempt, which is why the Conservatives voted against the Bill. At this time of year, people should be reflecting on another year gone by all too soon and looking to the new year with hope, ambition and optimism, but so many employers will now enter 2025 with fear. Many will be thinking again about that planned expansion or the investment in new equipment or premises. Worse, some will be thinking about who they need to let go—never mind awarding the pay rises in the spring they once hoped to give.

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[Yuan Yang (Earley and Woodley) (Lab)]

Today I stand proud to welcome the Budget, which takes long-term fiscal planning seriously. I welcome a Government who will take us away from the course the previous Government steered, away from austerity, and away from the chaos and confusion of the past few Budgets.

First, I want to make a brief point about tax simplification and the confusion across the Chamber in this debate and in the many amendments. The way to reform a tax system is not to argue for various exemptions, reliefs and get-out clauses for different subsectors, but to have a consistent approach to collecting tax applied across the whole economy and then to fund those sectors of the economy, such as healthcare, transport and so on, which we should be funding. That is the approach the Budget has taken. Many Members of successive previous Governments have said that we need to simplify our tax system. I suggest that asking for dozens of small amendments to a Bill is not a way to achieve that aim. As my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) pointed out, that is not the way to run any tax system, not even on local government level.

[Graham Stuart]

Will the hon. Lady give way?

[Daisy Cooper (St Albans) (LD)]

Will the hon. Lady give way?

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[Yuan Yang]

I thank the hon. Member for his intervention and for highlighting the perilous state of GPs in my constituency of Earley and Woodley after 14 years of the previous Government stripping away the NHS. I am very confident in the announcements made by my right hon. Friend the Secretary of State for Health, which he has made several times in this Chamber, to take all funding decisions in the round. I very much look forward to seeing the quality of GPs improve. I also highlight the funding already announced for increasing the number of practitioners in GP surgeries. I expect to welcome them in my constituency, as well as across the UK.

I return to my point about long-term fiscal planning. The hon. Member for Hinckley and Bosworth (Dr Evans) made the point that we need to make choices. Over and over again on the doorstep I have been told that public services are broken, that crime too often goes unpunished on our high streets, and that mortgage rates, which have shot up wildly over the past few years, are too much of a burden on everyday families. All that creates uncertainty and it is that economic uncertainty that hurts businesses. That is why I welcome, for the first time in many years, a credible Budget that addresses the fundamental problems facing our society. Yes, we have to understand the current fiscal situation in the context of the bad decisions that were made before us. We all know about the tax giveaway mini-Budget under Liz Trust and the perilous effects it had on gilts, pension funds and, of course, mortgages, for which we are all now paying the price.

[Graham Stuart]

Will the hon. Lady give way?

[Yuan Yang]

I will give way in a moment.

I add to that the bad decisions made in the previous two Budgets under the right hon. Member for Godalming and Ash (Jeremy Hunt). Those decisions were not credible. It was not credible, on the March 2024 OBR forecast, that the next Government would do anything about schools, special educational needs and disabilities or the NHS. Those were not credible promises made in the last two Budgets. Those giveaways were made by Governments without a plan; Governments who literally cut and ran by calling an early summer election so they would not have to face the consequences of their bad fiscal choices. They left us with a bill to pay and this Government are now making that possible in a considered way.

[Graham Stuart]

I am extremely grateful to the hon. Lady. She rightly highlights interest rates and mortgage payments. Was she disappointed when the OBR’s assessment of the Budget suggested that interest rates were going to stay higher for longer as a result of these measures? I invite her to discuss the topic under discussion today, rather than the past Conservative Government. We can have debates on that, but what we are trying to drill into today are the actions of this Government and their real-world impact on those who can least afford it.

[Yuan Yang]

I thank the right hon. Gentleman for his point. I always welcome conversations with the OBR, whose representatives came before the Treasury Committee only a few weeks ago. In that Committee discussion, we had a full debate on its forecasts. It found that the long-term infrastructure and capital spending in the Budget, which is made possible by the different tax announcements the Government have set out, means that the economy will, in the long run, be 1.5% larger. I would add that the forecasts in the OBR’s assessment of the Budget have not yet taken into account all the various details of the measures that will be announced in the forthcoming months. I expect those forecasts to improve.

To return to the bill that the Government are now paying, we need to build back our economy and public services. That task requires at least a decade of national renewal. That is why in the Budget we set out credible long-term funding commitments and plans for where the money comes from.

On small businesses, I recently spent Small Business Saturday out and about visiting local employers across my constituency of Earley and Woodley. I agree very much that those small businesses are the backbone of our local economy; they bring character and jobs to our high streets. One such shop I visited is called UnderTwoK, a shopfront on Wokingham Road. I asked the owner, Mark, what the Government could do to help small businesses like his. He said:

“keep going with the focus on economic stability and clean energy. That’ll bring more people our way.”

Small businesses know that the Government are on their side. They know that, because the Chancellor increased the employment allowance from £5,000 to £10,500, ensuring that the rise in employers’ national insurance contributions will not hit the smallest businesses. Those employing four members of staff on the minimum wage will not be hit by the measure. That means that 865,000 employers will not pay any NICs at all next year and over 1 million will pay the same or less than they did previously. The changes have been very much welcomed by the Federation of Small Businesses.

The top concern I heard about from those retail businesses is not about NICs, but about shoplifting and crime on our high streets, which all too often goes unpunished. The funds raised in the Budget allow us to employ over 13,000 additional neighbourhood police officers, police community support officers and special constables by 2029. They will also fund 1,200 new police officers. Introducing the specific offence of assaulting a shop worker and attaching prison time to that offence is backed up by the commitment to put £2.3 billion towards prison builds over the next two years. That is an example of how we are helping small businesses: not just by talking the talk, but by walking the walk fiscally.

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[Dr Jeevun Sandher (Loughborough) (Lab)]

This Labour Government will invest to rebuild our broken nation. Investment in our future will be paid for by tax revenue, and today we are debating the largest revenue-raising policy in our Budget. I am proud that revenue will be raised from the largest businesses to fund the homes, jobs and skills that we need to create a good, affordable life for us all. For those of us in our nation who cannot afford a decent life, the picture has become increasingly bleak: non-graduates and the young are locked out of the opportunities that previous generations had, and there are not enough homes, good jobs or skills.

We are raising the money for investment in homes, jobs and skills from those who are most able to afford it. We are raising £23 billion—investment that every business, family and young person will benefit from—and 75% of the revenue is from the largest 2% of businesses. We are raising that money while protecting the smallest businesses by increasing the employment allowance; the Federation of Small Businesses has said that that is a huge help as we bring in this revenue raiser. Half of all businesses will pay the same or less, and a quarter of a million will see their tax bill fall.

[Graham Stuart]

The hon. Gentleman is most gracious for giving way. He is also a highly distinguished economist. He has talked about this record tax-raising element. What will the net value of the £23 billion or £26 billion be, after we have looked at behaviour change, reduction in corporation tax receipts and compensation of the public sector? How much of that will come into the Government coffers?

[Dr Sandher]

I thank the right hon. Member for his incredibly kind words. For me, this is actually rather simple. I follow the Office for Budget Responsibility forecast, which goes through the Treasury policy costing and gets signed off. Those are the numbers I look at, and that is the money that will come in.

We are raising the money, as set out in those forecasts, in a fair way to invest in our future prosperity. We are using that money to build the homes that we need. In the mid-1990s, it took a young person around three years to save for a deposit. Now it is over 14 years, and in London it is nearly 30. That is why nearly half of young people are living at home with their parents, and why we are investing the tax revenue from the measures that we are discussing in the affordable homes programme. That means more homes for young people.

We are also using this money to create good jobs. The idea that someone could leave school and get a decent wage left our nation long ago. There are low-paid and insecure service jobs for some, but many are unable to get a job at all. Today, around 15% of young people are not in education, employment or training. Our warm homes plan, which will upgrade 300,000 homes, will also create tens of thousands of good jobs.

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[Ms Stella Creasy (Walthamstow) (Lab/Co-op)]

It is extraordinary to follow Opposition Members, with their short-sightedness and, frankly, short memory of the damage they have done to this country. Indeed, it is the very definition of chutzpah. I have been in this place for 14 years, and I watched what happened unfold in my constituency and across the country. That is how we got to this Bill today. New MPs may wish to rewrite history, but many of us can give testimony to the damage the Conservatives did.

This country should be grateful that we now have a Chancellor who is facing up to the fantasy public finances that we inherited from the previous Government, and who is trying to rebuild this nation. We finally have a framework for improving our rail services. Anybody thinking about getting on a train this Christmas knows how far we have to go. The damage lies at the door of the previous Conservative Government.

This Government are devolving meaningful powers to local government and generating clean electricity, which are just two things that the previous Government could not even understand, let alone get a grip of. We are certainly developing a better approach to our infrastructure.

In their final years in office, the Conservatives passed tax cuts that the country could not afford. There may have been genuine shocks around the world, but we can see the damage the Conservatives did, and we can see that they chose to compound it with bad choices. They did not just break Britain; they slashed it and burned it to the ground. That means this Government’s first year in office is a salvage operation. The previous Government’s decision to prioritise fake tax cuts over sustained investment in our public infrastructure has cost us all dearly.

Those who are sceptical of what I am saying should stand in an A&E and see the trolleys in the corridors, as 7.9 million people still wait for operations. They should talk to the schools with reinforced autoclaved aerated concrete, to the councils barely clinging on to provide social care, and to the police who just do not exist on our streets.

[Graham Stuart]

Will the hon. Lady give way?

[Ms Creasy]

For donkey’s years, I listened to the right hon. Gentleman try to claim that this country was on the up. I have seen the alternative. Please let him justify that.

[Graham Stuart]

As the hon. Lady knows, 4 million jobs were created under the last Conservative Government. She has just talked movingly about patients stuck on trolleys in corridors. Could she explain to the Committee how the Labour Government’s policies in England will differ from the policies of the Labour Government in Wales, which has far worse outcomes and worse waiting lists than anywhere in England.

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[Gareth Snell]

I wish to start by reflecting on something that the hon. Member for Grantham and Bourne (Gareth Davies) said in his opening speech. He talked about socialists thinking that taxes just flow in. Given that he was a member of a Government that raised taxes to their highest level in history, perhaps this season it is less secret Santa for him, and more secret socialist. Perhaps, if he is lucky, under his Christmas tree on 25 December he will find a red flag that he can fly. I jest, Madam Chair, but the point is that that Government agreed with tax and spend—they taxed; the trouble was what they chose to spend the money on.

That is the difference between this Government and the Government that came before: we have made clear commitments about what we will spend the money raised by this national insurance Bill on. We will make investments into the NHS and our public services, such as our schools and hospitals, and we will fix the railways. [Interruption.] The hon. Member for North Bedfordshire (Richard Fuller) chunters, but I cannot actually hear what he is saying. If he wishes to intervene, I will happily give way—no, I thought not.

The fact of the matter is that although this is not a decision that I would particularly have liked the new Government to make, having looked at the levers available to us and having made a political choice to protect the pay packets of individuals in work, this is a way of raising revenue.

[Graham Stuart]

Will the hon. Gentleman give way?

[Gareth Snell]

I often think that we do not hear enough from the right hon. Gentleman, so on this one occasion I will give way.

[Graham Stuart]

Given the competition on the Labour Benches, the hon. Gentleman is one of the more honest and up-front Members in addressing some of the issues. Does he regret the exclusion of the various groups we have heard of today, from hospices to social care and childcare? Will he urge Ministers to look at whether they can create a more coherent and joined-up approach, so that the £22 billion—or whatever it is—going into the NHS actually works to improve the healthcare of the nation?

[Gareth Snell]

If the right hon. Gentleman hangs fire, he may be surprised by some of the things I will say as I try to progress my speech. Although, in that context, is it not laughable and ludicrous that some of the most important parts of our social care sector—our air ambulances and our hospices—are dependent upon charity; that they have to rattle tins in supermarkets, dependent on handouts and philanthropic grants on a non-reoccurring basis, just to continue the service they deliver? There is a much broader conversation that we have to have as a nation about how far general taxation should fund some of those programmes. The right hon. Gentleman rolls his eyes, but I would rather make a small contribution to ensure that hospices and air ambulances can run than to have to watch people sit in baths of beans to try to ensure that vulnerable people get the help and support they need when they need it. He may disagree with that, but we should discuss that broader point of how we fund some of those things and whether we consider them to be vital infrastructure to our health and care system.

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[Graham Stuart]

It is a pleasure to follow the hon. Member for Stoke-on-Trent Central (Gareth Snell), who I am pleased to say honoured his words at the beginning of his speech, quite rightly. I think that is because he has been in this House for some time and knows the difference between legislative intent and legislative outcome. No one believes that the Minister on the Front Bench or other Ministers wilfully want to damage GPs and hospices —how could anyone reasonably want to do that? However, that is the effect of this Budget of broken promises overall, and of the particular measure on national insurance contributions that we are debating today.

No one has really explored where this measure came from, but the genesis of it was actually a desire, in the pre-election period, to reassure those with long memories who thought that Labour was not a party of growth. In trying to reassure the nation that Labour was on the side of business, it was saying, “Economic growth is mission No. 1, so if you are an entrepreneur, you can relax, because we are on your side.” The other big fear about Labour Governments over time is that they will come along and raise people’s taxes. Labour therefore came out with very specific pledges and oft-repeated promises again and again, saying that it would not raise an array of taxes, including of course national insurance contributions. That is why Paul Johnson, who is an independent commentator, said that he thought this measure was an absolutely clear breach of that pledge.

On coming into power, the Government said there was this £22 billion black hole, and Labour Members have mentioned it again today. I think the hon. Gentleman was notable in not doing so, because he knows there is no substance to it.

[Gareth Snell]

Will the right hon. Gentleman give way?

[Graham Stuart]

The hon. Gentleman can intervene to rectify that in a moment if he feels the need to do so for reasons of tribal loyalty. Again, the OBR said there was nothing in its calculations that supported or validated—I think the word used was that it did not “validate”—the so-called £22 billion black hole, but let me give way to him so that he can rectify that omission.

[Gareth Snell]

The phrase damned by faint praise springs to mind. To be clear, I think the analysis of the Treasury and the Chancellor of the state in which we found the public finances is absolutely accurate. I think the remedies we are taking, while unpalatable to some, are necessary. I just wish we were able to mitigate some of the worst aspects of them.

[Graham Stuart]

I thank the hon. Gentleman, and it is good of him to show that tribal loyalty. He did not criticise the OBR, but it said that it could not validate the so-called analysis. The £22 billion black hole does not exist, and it is quite clear from the OBR that that is true.

Let us, however, assume that the black hole is true: I think the Government are spending £1,270 billion this year, so let us assume that, in that £1,270 billion, this gargantuan black hole of £22 billion actually has veracity, while it does not. Having gone to the lengths of forcing even someone as up front and candid as the hon. Gentleman to feel obliged under tribal Labour rules to keep backing this measure, and having established the figure, one would think that the Government would want to come forward with a tax rise, if that is what they wanted to do all along. Alternatively, to give the Government credit, perhaps they came into office and found that things were much worse than was thought to be the case beforehand, in which case they would want to come up with a rational way of raising the funds with minimum possible damage.

I suggest it could be said to be a fib, but let us say there is a £22 billion black hole and they need to fill it. The Government should come forward with sensible tax plans. The Government have reneged on their pre-election promises, so why not renege on this one, and come forward with a sensible tax that does not particularly disincentivise those who are furthest from the jobs market? That is what the reduction in the NIC allowance to £5,000 does, and we know that it is particularly going to hurt people are struggling to get back into work, perhaps after a mental health episode, or perhaps because they are young and are struggling to get into the jobs market.

There may be worse taxes than the way this one will work out. I think £26 billion is the headline amount that will be raised and taken out the economy, but 76% of that in year 2 or 3—whichever it is—will come out of wages. By my rough arithmetic that means about £19 billion is going to come out of pay cheques, which is the very thing the Government were trying desperately to avoid doing. This measure will take £19 billion out of pay cheques, and because of the reduction in investment, the reduction in employment and the resulting reduction in profits, it will net only £16 billion.

Then the Government, having got that £16 billion, have decided to compensate the public sector, and we know about this because of the changes the OBR put out at the time of the election. It had to make a correction, because it had clearly been asked and told to allow another £800 million or £900 million for social care, recognising the issues that have been raised so powerfully by colleagues today. However, that was changed and removed, and it had to make an amendment to its response. By the time we have taken off the compensation as currently restricted to the public sector, which I think rises to about £5 billion, that takes the net receipts to £10 billion or £11 billion. That is a £26 billion hit to the economy, a reduction in investment, higher interest rates, lower growth, and £19 billion removed from working people’s pay packets—the people who Government Members believe they are on the side of—yet the measure nets only £10 billion or £11 billion to spend on public services. It is truly a ruinous approach to raising the money.

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[Graham Stuart]

There are so many places where the Government have spent it. Having claimed this £22 billion black hole, they promptly agreed a £10 billion pay rise for their trade union backers. Train drivers on more than £60,000 a year are getting £10,000 pay rises while in talks about a four-day week. Those train drivers are not available for the holiday season, because they are so awash with that backdated pay increase that nobody wants to do any overtime. There are so many other areas. We have GB Energy to invest in renewable energy. I was the Energy Minister until April, and there was no shortage of investment available for renewables in this country. Before anyone points to last year’s failure to get offshore wind, that was because of the price window that we imposed. We did not want to overpay for it. There was no shortage of appetite, as was shown this year. One reason why we moved to an annual programme was precisely to ensure that we did not overpay, but could bring on all the renewables we wanted. There are so many areas where the Government could instead not spend the money that they have chosen to spend.

Fundamentally—we need this conversation, including in my party—one of the things that makes the Conservatives the most successful democratic political party in the history of the entire western world, I am proud to say, is that we believe in proper analysis and deferred gratification. We have to make sure that we have a growing private economy, because that is where wealth comes from. If we allow money to fructify in the hands of those who create wealth, it will duly come back to the Treasury with interest, as the Financial Secretary of Hong Kong said many years ago, in rather more pithy terms. The most important thing is to live within our means, and to recognise the importance of feeding the private sector economy, because it is only wealth from that sector that allows us to deliver the public services that we all want.

I support new clause 1. The hon. Member for Stoke-on-Trent Central made it clear that he has concerns about the Bill’s impact, and I hope that the Minister can acknowledge that impact. At the very least, we should look back and check that the impact is, as I hope it will be, more akin to the growth-producing, foundation-fixing, black hole-removing vision of the Government. However, if by any mischance the combined Opposition parties are right about the Bill’s disastrous impact on the most vulnerable, the people furthest from the labour market and the rest, we should find out the truth, and whether the Minister or his colleague the hon. Member for Stoke-on-Trent Central is correct.

I also support amendments 13 to 18. The NHS is the centrepiece of the tax-raising and spending elements of this Budget, and this rise in national insurance contributions will contribute £22 billion—or £20 billion; I hear different numbers at different times, but I will stick to £22 billion—to the NHS. There are a couple of ways to sort out the problems, because the system is entirely dependent on social care provision, the hospice system and ancillary services, including primary care—the things that make up the NHS. In my area, when an ambulance goes to Hull royal infirmary, it may take an hour to get the patient in. That is because patients in the hospital cannot be got out of their bed—even though they are ready to leave—and into social care provision. The Bill will make that worse. Perhaps funding can be vired over to social care. Through the amendments suggested by my hon. Friend the Member for Grantham and Bourne (Gareth Davies), we are probing the Government and the Minister, who is a decent, honourable man. We are asking them to look at the issue creatively and ensure that the misgivings of those such as the hon. Member for Stoke-on-Trent Central are listened to.

[Daisy Cooper]

It is music to my ears to hear a Conservative Member of Parliament finally recognise the connection between the NHS and social care. The right hon. Member will remember that former Prime Minister Boris Johnson stood on the steps of 10 Downing Street and promised to fix social care for good. Could he let us know why he did not?

[Graham Stuart]

The hon. Lady has not been in the House quite as long as I have. I was first elected in 2005, and in that Parliament I spent a lot of time—mostly in Westminster Hall, as I recall—in debates with then Labour Ministers talking about the importance of having a joined-up, coherent approach to the national health service and social care. It is clearly fiendishly difficult. The coalition Government, of which the hon. Lady’s party was a part, and the Conservatives kept working at it. We changed the name of the Department of Health to the Department of Health and Social Care precisely because of that. It is challenging, because social care is delivered through local authorities, but the opportunity is there. Before the Government get all that wiring and complexity fixed—we were working devotedly at that—they could vire funding over to the sector, or exempt from the Bill the sectors on which the NHS depends. Pouring money into the Hull royal infirmary while it is unable to unload the ambulances coming in, or get the healthier patients out, is a crazy approach. I am sure that the Minister recognises that.

I want to mention the impact on social care. Last Friday, I went to Merrywick Hall, a great example of a small, family-run, residential care home. Its 31 residents are not all elderly, but they all have learning disabilities. Some of them are elderly, making them doubly disadvantaged. The home charges a basic rate of just £699 a week to care for those people, and its staff are stretched. I met Katie, who runs the home, and her husband Carl, who oversees the finances, although the home is owned by another. It was quite clear that that they were not running a business in the way that I would recognise as a former businessman; they were running an institution that was absolutely committed to the welfare of the people in it. Between this jobs tax, which the Minister is foisting on us, and the national minimum wage increase, they have to find an extra £56,000 a year, which is equivalent to the care costs of 1.5 residents. That is the reality. That system and those places are vulnerable. If those places go, there will be a massive knock-on effect on the rest of the system.

I hope that hon. Members from across the House are less interested in the system—although it is our job to worry about it—and much more interested in the people. People cannot get much more vulnerable than the elderly who have learning difficulties.

[Dr Luke Evans]

When it comes to social care and GPs, there is a situation that has been described to me as Schrödinger’s care. Providers are seen by the state as being private, yet their services are commissioned solely by the NHS, which means that they are caught both dead and alive when it comes to NICs. This has happened either by design in the Treasury, or by accident. The answer from the Chancellor, the Prime Minister and the Health Secretary—I expect the Minister to say this—is that funding will be allocated in the usual way. The problem is that that will happen in April, four months away, while decisions are being made now. There are potential closures, and certainly redundancies, or decisions not to employ. How will that be addressed? Does my right hon. Friend agree that the Minister needs to address that, because these institutions are listening now, and need to know that answer?

[Graham Stuart]

I thank my hon. Friend, who is of course a doctor. In this and previous debates, such as Second Reading, it is good to encourage a discursive approach in the Chamber, if we are to be valuable. I hope that we will continue to gather in this Chamber, talking to each other and listening. No one would think less of the Government for making changes. I cannot speak for those on the Opposition Front Bench, but I would seek to give the Government some political cover if they found a way to ameliorate the impact of this measure on the system—and, more importantly, on the human beings on which the NHS relies.

In 2021, the then Leader of the Opposition, now Prime Minister, promised a plan

“to ensure that those with the broadest shoulders pay their fair share.”—[Official Report, 8 September 2021; Vol. 700, c. 295.]

Yet all the analysis available to Government Members shows that those with the least will pay the highest price for this measure. In my constituency, HICA, a large not-for-profit provider of social care homes and in-home care—a brilliant organisation that has had the same chief executive for the past five years—was finally getting a surplus to invest in its stock, some of which is almost as old as me, and to give its staff something above the national minimum wage. But following the changes in the Budget, it faces a bill of £3.5 million, more than offsetting any hope of a surplus, which it desperately needs in order to invest in its people and stock. The money will be taken away from that good social purpose in my local area, and instead will go into the Chancellor’s mythical black hole—for payment of additional sums almost greater than the total income of many pensioners, and for pay rises, for train drivers, so that they can pay their union fees; and so that Labour Members can carry on all too rarely mentioning in the Chamber their sponsorship by people who dictate so much of what they share with us—the hon. Member for Stoke-on-Trent Central aside.

Finally, it is interesting in these debates just how few of the more than 400 Labour Members—they can all cheer on the Government Benches at how many Labour MPs there are—want to come and defend these measures. The hon. Member for Hexham (Joe Morris) spoke bravely, but he looked a little world-weary. I think he has been going out and about in his constituency, so I am sure that he is hearing the same thing as me, but said a little more angrily, because he is responsible for it.

I appeal to those Members who are not here to seek change. The 2012 Budget by George Osborne, crudely and rudely called the omnishambles Budget, included a measure to bring in 20% VAT on static caravans. The Treasury civil servants love dusting these things off—they hate an anomaly more than anything. Those are the very caravans that ordinary working people use to holiday on the coast. I did not, alongside colleagues, run my campaign in the press; instead, I built up support from Conservative Members and coalition colleagues, who realised how damaging that measure would be for jobs in their area, the holiday opportunities of ordinary working people, and an industry that is 95% manufactured in the UK. People told me, “Change is impossible—this has been announced in a Budget. You cannot overturn a Budget measure.” You and I, Madam Chair, having been here some time, know that that is not true. Politics is a matter of arithmetic. If Labour Members can build enough support among colleagues on the Government Benches—they do not need to do it publicly, and they do not need to tell us about it—they have every chance of changing this. The Whips and Ministers start getting spooked when 15 Members turn up. If Labour Members can get 30 or 40, they can make a change. They should not feel powerless.

The Government could make changes. They could move £3 billion or £4 billion over to social care, hospices, GPs and the like. They could agree to our amendments. They could come up with some other solution. They have the power to do it. Stubbornness and perhaps a certain arrogance has crept in because of the size of their majority. Government Members, who go out to talk to their constituents more frequently than Ministers, will be in a great position to tell Ministers that up with this they will not put.

[Daisy Cooper]

The right hon. Gentleman is encouraging the Government to ameliorate their position. Does he agree that there is one very clear way of doing that today? Members on all Benches could vote for Liberal Democrat amendment 1, which excludes all GPs, dentists, hospices and charitable health and social care providers from this NICs increase.

[Graham Stuart]

Liberal Democrats did remarkably well at the election, pretty much on the back of sewage. Between water stunts and sewage, a record number of Liberal Democrats have been returned. I am pleased to say that the Conservative party remains His Majesty’s Opposition. Therefore, I urge the hon. Lady and her colleagues to support amendments 13 to 18, and new clause 1. She will find that exactly the same is achieved, but with the backing of His Majesty’s Opposition.

--- Later in debate ---

[Dave Doogan]

I rise to speak to defend Scotland’s NHS, including our GPs, hospices, care homes and nurseries, from this Labour Government’s national insurance tax hike, as well as to protect the charity and higher education sectors. I am proud of the amendments the SNP has tabled to the Bill to protect these vital services from the increase in national insurance contributions put forward by the Government. The fears are genuine and escalating over the job cuts and service reductions that will be the inevitable and plain and simple consequence of this fiscal madness.

We in the SNP have consistently highlighted the brutal impact that Labour’s tax rises will have on GPs, charities, care homes and other sectors, with organisations warning that deep cuts will be made to the services they provide—vital services that are no less essential to communities and individuals than secondary care services just because they are received in the community or from a charity. That is why we have tabled amendments 4, 5, 6 and 26 in my name and the names of SNP colleagues.

On higher education, the University of Edinburgh was last month reported to have opened a redundancy process for staff as a result of Labour’s tax hike, and Universities Scotland is warning of a potential £45 million tax burden for Scottish universities. Yet again, we see key sectors of the Scottish economy hammered by a London Treasury out of touch, out of ideas and, if this goes through, demonstrably out of control. Higher education, agriculture, and oil and gas are all demonstrably larger elements of the Scottish economy than they are of the English or UK economy. This Government, with NICs and other specific tax increases or allowance removals, are hammering particularly important elements of the Scottish economy. As usual, what England wants Scotland gets.

The Labour Government’s national insurance increase will be a disaster for Scotland’s healthcare providers, voluntary organisations, nurseries, universities and colleges, but who on the Labour Benches has come along to speak up for those organisations in Scotland? Nobody. Not one Labour Scottish MP made a speech to protect Scotland’s interests. But Labour MPs from Scotland were there to nod through and vote through the cut to the winter fuel payment, freezing Scotland’s pensioners; Labour’s bedroom tax, entrenching poverty in Scotland; Labour’s two-child limit, punishing the poorest in Scotland; taxing Scotland’s oil and gas sector to the brink of extinction; attacking Scottish agriculture; and gouging Scotch whisky. They were all here to make sure that that happened and to speak to that, so I will leave the people of Scotland to draw their own conclusions about this particular lack of activity from Scottish Labour MPs.

[Graham Stuart]

I am grateful to the hon. Gentleman for giving way. When did the SNP do an about-turn on Scottish oil and gas? As far as I can tell, it seemed as opposed to its continuation as the Labour party is now in government.

[Dave Doogan]

I thank the right hon. Gentleman for his intervention. I refer him to Hansard from the previous Parliament. The comments I have just made are entirely consistent with the comments I made in the last parliamentary term.

With each day that passes, we learn more about the damage Labour’s Budget will inflict on household bills, businesses and charities, yet despite those warnings the Labour Government are determined not to listen and are ploughing ahead with this devastating proposal. The SNP will always stand up and protect Scottish jobs, Scottish services and Scotland’s people. That is reflected in John Swinney’s budget—a balanced budget in the interests of the people of Scotland and the businesses of Scotland. That is the SNP way. We have done it this year and we have done it in every one of the 17 previous years we have been in the Scottish Government.

Do the UK Government understand how commissioned services work? We have heard that quite a lot this afternoon and it is becoming increasingly clear that, at best, they have a sketchy understanding of why vital services are provided by non-statutory service providers. What is going to happen when this measure unwinds into the real economy is that charities, GP surgeries, hospices and other vital elements of healthcare provision will not have reserves. They are already operating at the very margins of financial sustainability, so when the sums do not add up, they will have two choices. They will approach the commissioning authority that has commissioned their services to ask for an uplift in their fees. The answer will be no, because the money is not there. Alternatively, they will withdraw their services or draw down their services. Either way, it will be enormously challenging and extremely damaging for some of the most vulnerable in our society.

--- Later in debate ---

[Jim Dickson (Dartford) (Lab)]

It is a pleasure to speak once more on this critically important Bill, after an excellent debate on Second Reading several weeks ago. I do not wish to rehearse the entire debate on these national insurance changes, but I will raise a few points about the Bill and why it is necessary.

As we have discussed at some length, this Government inherited public finances that were in a parlous state and public services that were not delivering what residents in Dartford and across the UK need. Yet, from their contributions today and on Second Reading, I do not think that Conservative Members have really accepted that legacy. In the five stages of grief, they are still in denial.

When the previous Government left office—it is painful to repeat these statistics—NHS waiting lists were at 7.6 million, with 300,000 people waiting longer than a year for treatment. Those waiting lists were already growing before the pandemic, with the number of people referred but waiting for treatment doubling between 2010 and 2019.

On crime and community safety, neighbourhood policing was decimated and PCSO numbers were halved, and the number of arrests has halved since 2010, including sharp drops for theft. Perhaps most concerningly, we face a real crisis in our prisons. The National Audit Office recently confirmed:

“The current crisis in the prison estate is a consequence of”—

the previous Government’s—

“failure to align criminal justice policies with funding for the prison estate, leading to reactive solutions which represent poor value for money.”

That is as close as the National Audit Office ever gets to saying, “You wasted money.”

The previous Government also spent a whopping £715 million on their Rwanda gimmick over two years, in exchange for a sum total of four voluntary departures. That is the legacy of the Conservative party, yet Conservative Members still refuse to acknowledge their mistakes. They vote against every measure, including the national insurance changes to raise crucial funding to fix the problems they left behind, without ever saying which investments in public services they would scrap.

In a long and, at times, entertaining speech, the right hon. Member for Beverley and Holderness (Graham Stuart) rehearsed the greatest hits of the previous Government, in which the omnishambles Budget seemed to feature very strongly, but his speech was fatally holed below the waterline by his inability to answer one simple question from the hon. Member for Tunbridge Wells (Mike Martin): “What would you do instead?” We heard a lot of flannel about train drivers, but that was basically it.

[Graham Stuart]

I talked about the need for fiscal discipline, one element of which is taking at least £12 billion of savings out of the benefits system, because we cannot continue with more and more of us out of work and out of the workforce. Most importantly, I also said that we have to grow the economy first, because that is the only way to sustain it. This Budget had the opposite effect, as the OBR has laid out.

[The First Deputy Chairman of Ways and Means (Judith Cummins)]

Order. I remind Members that this debate in Committee is about national insurance contributions.