National Insurance Contributions (Secondary Class 1 Contributions) Bill

Debate between Helen Maguire and Stella Creasy

Committee of the whole House & 3rd reading
Tuesday 17th December 2024 Commons Chamber

[Ms Creasy]

He will therefore understand why I suggest that we as a Parliament could look at how we address those issues. Right now, the sector is concerned. I do not think that is a surprise to anyone. It may be a damascene conversion for the Conservative party to suddenly care about it, but there is a concern across the sector about not going backwards.

Clause 3 will increase the employment allowance from £5,000 to £10,500 and will reduce the current £100,000 threshold. It might be perceived that for some small businesses, particularly in the childcare sector, that would be a potential way forward in reducing some of the impact of the changes so those businesses can continue to expand. However, the challenge is right now, with the majority of childcare providers not qualifying for the employment allowance because of the way in which the sector operates and because it has been ignored, dismissed and derided by previous Governments. The majority of positions are produced in the private sector. That means they do not qualify.

There is perhaps an unintended irony in all that, however, which is that investing in more childcare, as we are doing, means that many of those small businesses will not be eligible for the employment allowance. As it is about companies that receive less than 50% of their income from public funding, while many childcare providers were originally in that position before money started going into them, the irony is that many fewer will be in that position in the coming years as a result, meaning that they will be denied the opportunity.

Childcare provision in educational settings will be able to benefit, so it is not a total denial. That means that if we are looking to expand childcare, in the current environment and without looking at how we can make that an equal opportunity for all childcare providers, that will have to be done through the state sector, which means having to find nurseries that can be provided in spare classrooms or childcare settings within an educational setting. That accounts for a small amount of the structures in place at the moment, and there is a risk that we will not see the investment in expansion because expansion in previous times has come through the private sector.

My concern, if I am frank, is that this is a perfect storm of our own making. With the best intentions of investing money from the Budget in childcare, we may inadvertently make it harder to expand childcare. That is why we need a review, because it is not clearcut that that will be the outcome, which is why I have tabled new clause 4. I also urge Ministers to look at business rates, which currently add around £21,000 to the average nursery. We found support in the Budget for those in retail and hospitality. We could look again at the childcare sector on the same basis.

Above all, we need to raise those questions and ask how we can ensure that we do not see a curtailment of childcare in this country, because the reality is that fees will then go up, making it even harder for parents to use it. That is what the Pregnant Then Screwed surveys are showing us: 90% of parents who have a place are terrified that costs will go up in the coming year, and 60% say that if that happened they would reduce their hours or leave work altogether.

This is a tough time, this is a tough Budget, and there are tough decisions to be made. We are not shying away from that and I am proud to be a member of a political party in government that is getting a grip of this country’s needs. However, I am also determined, as I am sure is everybody on the Back Benches, to make sure that we do that in the best way possible. If the Minister will not accept new clause 4, I hope he can tell us what work the Treasury is doing to ensure that childcare as a form of economic infrastructure can grow and support this country as it recovers from the last 14 years of Conservative Government.

We know that all those who will be affected—in the choice to work, to stay in work and to stay open and run a nursery—are literally the ones who have been paying the price of having a Conservative Government. We do not wish to make them pay all over again. The Conservatives broke Britain. We now need to be honest about the work and the investment that it will take to repair it.

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

I am greatly concerned about the consequences of this Bill. There are consequences for businesses, for employees and for essential primary care providers in my constituency and across the country. The Bill represents an unfair jobs tax that risks harming the livelihoods of countless individuals and the viability of small businesses at a time when they are already grappling with a multitude of challenges.

I wish to begin by highlighting the impact that this legislation will have on community pharmacies, which are at the frontline of healthcare in our local areas. The owner of Horton Pharmacy and Travel Clinic in Epsom has expressed grave concerns about the financial burden that this increase in employer national insurance contributions will impose. He told me:

“We are estimating that it’s going to cost an extra £12,000 a year. It’s very distressing and making it harder to keep our doors open and help reduce the burden on other parts of the NHS.”

Community pharmacies such as Horton Pharmacy play a critical role in alleviating pressure on our overstretched NHS by providing accessible healthcare and advice, yet the Bill threatens their financial viability, which in turn risks leaving constituents without the local care they rely on, thus increasing the burden on the NHS.